Limited Company vs Sole Trader Calculator

Compare tax efficiency, National Insurance, and net take-home pay for 2026/27

Annual Business Profit (£)

Director Salary (£)

Sole Trader Take-Home

£0

£0/month

Limited Company Take-Home
£0
£0/month

Difference: £0 (0%)

Detailed Tax Breakdown

Estimate only — calculated from the details entered and rates last verified September 2026. Your actual figures may differ.

These results are estimates for the 2026/27 tax year, based on the figures you have entered. They are for general guidance only and do not constitute tax, accountancy or financial advice. Your actual position depends on your full circumstances — please confirm it with a qualified accountant before acting.

Verified by Chartered Accountants: Figures checked by Apex Accountants' ACCA/ICAEW chartered accountants. Last reviewed September 2026.

2026/27 Key Tax & NI Reference Rates

Tax / NI Element	Sole Trader Rate	Limited Company Rate
Income Tax / CT	20% / 40% / 45% (PA £12,570)	19% (≤£50k) to 25% (≥£250k, 3/200 MR)
National Insurance	Class 4: 6% (£12.57k-£50.27k), 2% above	Employer NI: 15% above £5,000 threshold
Class 2 NI	Abolished (£0)	N/A
Dividend Tax	N/A	10.75% / 35.75% / 39.35% (Allowance £500)

Rates for the 2026/27 tax year — last verified September 2026.

Frequently Asked Questions

Should I set up as a sole trader or a limited company?

For profits above approximately £30,000-£40,000, a limited company structure is generally more tax-efficient because you can take dividends which are free from National Insurance.

How much tax can I save by incorporating?

Depending on profit levels, incorporating can save between £1,000 and £5,000+ per year in taxes compared to operating as a sole trader.

Is Class 2 National Insurance still charged?

No. Mandatory Class 2 NI was abolished from April 2024. Sole traders with profit above £12,570 receive automatic NI credits without paying Class 2 contributions.

What are the dividend tax rates for 2026/27?

For 2026/27, dividend tax rates are 10.75% (Basic), 35.75% (Higher), and 39.35% (Additional), with a £500 tax-free dividend allowance.

Related Services & Calculators

Important information about these calculators

Purpose. These free calculators are provided by Apex Accountants & Tax Advisors LTD to give an indication of common UK tax and accounting figures. They are designed to help you understand the general position before taking professional advice.

Not advice. The results are indicative estimates only. Nothing produced by these tools constitutes tax, accountancy, auditing, financial or legal advice, and using them does not create a client relationship with Apex Accountants.

Assumptions and accuracy. Each calculator applies published HMRC rates and thresholds for the 2026/27 tax year (last verified September 2026). Your actual liability depends on factors a calculator cannot see — other income, pension contributions, residency, and more.

Do not rely. Please do not make financial, tax or business decisions based solely on the output of these tools. Book a consultation with one of our chartered accountants (ACCA/ICAEW) first.

Rates change. Tax rates, thresholds and reliefs change with Budgets and Finance Acts. We review the calculators regularly.

Liability. To the fullest extent permitted by law, Apex Accountants & Tax Advisors LTD accepts no liability for any loss or damage arising from reliance on these calculators.

© Apex Accountants & Tax Advisors LTD. Figures checked by our ACCA/ICAEW chartered accountants. Last reviewed September 2026.