Sole Trader vs Limited Company

Should you stay self-employed or incorporate? See a full tax breakdown for both options based on your income.

Your Income
Enter your estimated annual revenue and outgoings
£

Total money coming in before deductions.4,167/mo)

£

Space rental, subscriptions, equipment, products, etc.

Taxable profit£50,000

Set a target take-home

Relevant for Ltd: retain profit in the company

Based on UK 2026-27 tax year rates (from April 2026). Simplified estimate – not financial advice.

At your income level

Sole trader saves you more

You'd pay £1,224 less in tax per year

Key figures

Take-home

£40,086

Sole trader (best)

Total tax

£9,914

Sole trader (best)

Sole Trader

Self-employed

Better
Revenue£50,000
Business expenses-£0
Profit£50,000
Income tax£7,486
National Insurance (Class 2 + 4)£2,428

Includes Class 2: £182/yr

Total tax£9,914
You keep£40,086

Effective tax rate: 19.8%

Limited Company

Director + dividends

Revenue£50,000
Business expenses-£0
Director salary-£12,570
Employer National Insurance-£1,136
Profit£36,295
Corporation tax£6,896
Dividends paid£29,399
Dividend tax£3,107

£500 dividend allowance applied

Total tax£11,138
You keep£38,862

Effective tax rate: 22.3%

Simplified estimates based on UK 2026-27 tax year rates (from April 2026). Does not account for VAT, student loans, or other personal circumstances. Consult a qualified accountant before making structural decisions.

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