Free comparison tool

Sole trader or limited company?

Enter your annual profit to see a rough, side-by-side take-home estimate for each route. It is a simplified illustration — not financial or tax advice, and not a recommendation either way.

Free comparison tool
No account needed
Built for UK small businesses
Estimate only — not advice

Not financial or tax advice — speak to an accountant about your own situation. Figures are a rough estimate from a simplified model. Based on 2026/27 rates — check HMRC, rates change. Uses England, Wales & Northern Ireland income-tax rates (not Scotland).

Example figure shown to get you started — change the profit above to match your business and this updates instantly.

As a sole trader

£40,268

estimated take-home a year

Income Tax: £7,486
Class 4 NI: £2,246
Class 2 NI: £0

As a limited company

£38,862

estimated take-home a year

Director's salary: £12,570
Employer NI (company cost): £1,136
Corporation Tax: £6,896
Dividends taken: £29,399
Dividend tax: £3,107

Rough difference

£1,406

In this simplified estimate the limited-company route shows roughly £1,406 less take-home a year — indicative only, not a recommendation, and before the extra costs and admin a company brings.

What this simplified estimate assumes

£12,570 target director's salary, where the entered profit can fund the salary and employer NI; remaining post-tax profit taken as dividends
Employer National Insurance included at 15% above £5,000
Assumes one paid director and no other employee, so no Employment Allowance is applied
rUK rates, 2026/27
Ignores running costs, accountancy fees and the extra admin of a limited company
No pension, student loan or other income modelled

This is a simplified estimate to help you think through the difference — not financial or tax advice, and not a recommendation either way. Speak to an accountant about your own situation before deciding.

Based on 2026/27 rates — check HMRC, rates change. Figures use England, Wales & Northern Ireland income-tax rates (not Scotland).

Thinking about which way to set up? Get the steps in plain English.

The LaunchKit Startup Guide walks through registering, the early admin and what to sort first — written for UK small businesses, not accountants.