Free tax calculator · 2026/27
Sole trader or limited company?
See what you'd take home each way on this year's rates, in a few seconds. No sign-up, nothing sent anywhere — the sums happen in your browser.
2026/27 rates for England, Wales and Northern Ireland. One director-shareholder, no other income. The company pays you the more efficient of a £5,000 or £12,570 salary, with the rest as dividends.
Your estimate
At this level there's very little in it. The decision comes down to liability, flexibility and your plans.
Tax and NI £13,889
Tax and NI £13,909
See the working
- Sole trader
- Profit
- £60,000
- Income Tax
- −£11,432
- Class 4 NI
- −£2,457
- Take-home
- £46,111
- Limited company
- Director's salary
- £12,570
- Employer's NI
- −£1,136
- Corporation Tax
- −£8,796
- Dividends
- £37,499
- Personal tax and NI
- −£3,977
- Take-home
- £46,091
How it works
Honest numbers, not a sales pitch
As a sole trader, you pay Income Tax and Class 4 National Insurance on your profit.
As a limited company, the company pays Corporation Tax on its profit. You then pay yourself a small salary and take the rest as dividends, which are taxed at lower rates than salary but only after Corporation Tax has been paid.
Which comes out ahead depends on your profit and how much you need to take out. Sometimes the answer is “stay as you are” — and we'd rather tell you that than sell you a company you don't need.
What the calculator leaves out
To keep it simple, it doesn't account for:
- Other income, such as a job, rental income or savings
- Pension contributions, which can change the answer considerably
- Student loan repayments
- Scottish income tax rates
- IR35, if you contract through your company
- The extra running costs of a company, such as accountancy and filing fees
This is a general estimate, not personal tax advice. Please talk to us before making any decision.
FAQs
Sole trader vs limited company
Is a limited company always more tax-efficient?
No. Since dividend tax rates rose in April 2026, a director who takes every penny of profit out of their company can pay more in total than a sole trader on the same profit. The company's advantage is mainly on profit you leave in the business, which is taxed at Corporation Tax rates only. That's why the calculator lets you compare both.
Why does the calculator use a £5,000 or £12,570 salary?
They're the two salary levels most owner-managed companies start from. £12,570 uses your full personal allowance; £5,000 avoids employer's National Insurance. The calculator works out both and uses whichever leaves you better off. Your real plan may differ, particularly if the company has other employees.
Should I incorporate if the numbers say so?
Not on tax alone. A company brings limited liability and can look more established, but it also brings extra admin, Companies House filings, public accounts and rules about taking money out. It's a decision worth talking through, and that conversation is free.
How accurate is it?
It uses the 2026/27 rates for England, Wales and Northern Ireland and assumes you have no other income. It's a reliable first comparison, but it is an estimate, not advice — your own circumstances will change the numbers.
Want a proper answer for your situation?
Bring your numbers to a free consultation. We'll look at your whole picture — other income, pensions, plans for growth — and tell you honestly whether a company makes sense.