Choosing between operating as a sole trader or through a limited company can have a significant impact on your take-home pay, tax liabilities, administrative responsibilities and long-term financial planning. Our sole trader vs limited company calculator helps UK contractors, freelancers, consultants and self-employed professionals compare both routes using current UK tax assumptions.
The calculator estimates your potential net extraction after accounting for Income Tax, Class 4 National Insurance, Corporation Tax, Dividend Tax, Employer National Insurance and accountancy fees. It also allows you to include other personal income and Employment Allowance eligibility, so you can model a more realistic scenario.
Figures are indicative only. They should be used for planning and education before taking advice from a qualified accountant or tax adviser. The calculator currently uses England, Wales and Northern Ireland Income Tax band assumptions; Scottish Income Tax bands are not modelled.
Enter your expected revenue, allowable expenses and accountancy fees. The calculator compares estimated sole trader take-home pay against a limited company route where profits are extracted through a director salary and dividends.
These figures estimate the tax generated by this business income, after allowing for the other personal income entered.
Enter your figures to generate a comparison.
| Financial breakdown | Sole trader | Limited company |
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These figures are estimates only. They do not include pension contributions, student loans, benefits in kind, retained company profits, VAT, CIS deductions, IR35 deemed payments or Scottish Income Tax bands.
This calculator compares the financial efficiency of operating as a sole trader against trading through a limited company. It is designed for UK contractors, freelancers, consultants and self-employed professionals who want a practical side-by-side view of take-home pay.
The results show:
The sole trader calculation starts with your revenue, deducts general allowable business expenses and sole trader accountancy fees, then estimates the Income Tax and Class 4 National Insurance generated by the remaining business profit.
Where you enter other personal income, the calculator treats that income as already using some of your Personal Allowance and tax bands. This helps show the marginal tax generated by the sole trader business income, rather than pretending the business income is your only source of income.
The limited company calculation deducts limited company accountancy fees, applies the selected director salary model, calculates Employer National Insurance where relevant, then applies Corporation Tax to remaining company profits. The post-tax company profit is then assumed to be extracted as dividends.
The limited company model can apply:
For many contractors and consultants, operating through a limited company can become more tax-efficient as profits increase. This is often because dividends are not subject to National Insurance and may be taxed differently from trading profits.
However, a limited company also brings more administration, company filing obligations, payroll requirements, Corporation Tax returns and usually higher accountancy costs. At lower profit levels, remaining a sole trader can sometimes produce a similar or better net result once those additional costs are considered.
This calculator has been reviewed for the 2026/27 tax year and includes current assumptions for Income Tax, Dividend Tax, National Insurance, Corporation Tax and Employment Allowance. The 2025/26 option is included for comparison against the previous tax year.
No. A limited company can be more tax-efficient at some profit levels, but it depends on your income, expenses, accountancy fees, salary model, dividend extraction, other personal income and administrative costs.
Yes. The limited company calculation includes Corporation Tax and applies marginal relief where company profits fall between the small profits and main rate thresholds.
Yes. It estimates Dividend Tax after applying the dividend allowance and stacking dividends on top of non-dividend income, such as salary and other personal income.
No. VAT, Flat Rate VAT Scheme calculations and VAT registration decisions are outside the scope of this tool.
No. It is a planning and education tool only. Your final position can depend on your full income profile, allowable expenses, pension contributions, retained profits, VAT position, IR35 position and wider tax planning.