Compare what you'd keep as a sole trader against running a limited company for 2026/27. Enter your annual profit and we model both — income tax and Class 4 NI for the sole trader, versus a tax-efficient small salary, Corporation Tax and dividends for the company.
This assumes you take all the profit out each year and it's your only income — the least company-friendly case. A company can pull ahead when you retain profit, pay into a pension, or split income with a spouse, so treat a 'sole trader wins' result as 'if you need all the cash now', not the whole story.
It depends. If you extract all profit as salary and dividends each year, a sole trader often keeps a similar or greater amount. Companies tend to win when you retain profit, contribute to a pension, or split income with a spouse.
Corporation Tax on profits — 19% up to £50,000, tapering to 25% by £250,000 — then dividend tax when you take profit out, plus some employer and employee NI on any salary.
Often once profits are comfortably into higher-rate territory and you don't need all the cash, or you want limited liability and pension-planning advantages. It's worth getting tailored advice before switching.
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