Sole Trader vs Limited Company Calculator
✓ Verified for 2026/27Business Earnings
£
£
Recommended Structure
Limited Company
£1,245 more take-home
Sole Trader Take-Home
£38,000
£12,000 total tax
Ltd Company Take-Home
£39,245
£10,755 total tax
Tax Savings
£1,245
by choosing Ltd Company
Structure Comparison
Sole Trader Take-Home
£38,000
Sole Trader Taxes (Tax + NI)
£12,000
Ltd Company Take-Home
£39,245
Ltd Company Taxes (CT + Div Tax)
£10,755
Sole Trader
49%
Ltd Company
51%
A Sole Trader pays Income Tax and Class 4 National Insurance on all business profits directly. A Limited Company structure pays Corporation Tax on profits first, but allows the director to extract money via a tax-efficient combination of low salary and dividends.
Verified for Accuracy (2026/27 Tax Year)
Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.How We Calculated This
- Input variables: Enter the relevant amounts, rates, or percentages in the form.
- Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
- Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.
Real-World Examples
Standard Scenario
A basic calculation applying standard UK tax bands and allowances.
Calculation runs based on standard HMRC rules.
With Pension or Deductions
Factoring in a percentage of salary sacrifice or pension contributions.
Deductions are calculated and adjusted accordingly.
Frequently Asked Questions
Is this calculator updated for the 2026/27 tax year?
Yes, all calculators are fully updated with the latest HMRC thresholds, personal allowances, and National Insurance rates for 2026/27.
Can I use this for official tax submissions?
These tools are for estimation and illustrative purposes only. For official tax returns, please consult a qualified accountant or reference HMRC directly.
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About This Calculator
This calculator uses the latest HMRC rates for the 2026/27 tax year. For illustrative purposes only — always consult a qualified tax adviser for formal advice.