Enter your annual profit and this tool works out your net cash both ways: as a sole trader (income tax plus Class 4 National Insurance) and as a limited company director taking the standard £12,570 salary with the rest as dividends. It also scans every profit level from £20,000 to £150,000 to find where the company route starts to win, if it does at all. Under 2026/27 rates the answer surprises most people: if you draw everything out each year, the company's tax edge is tiny and a typical accountancy fee wipes it out. The real case for incorporating is usually profit retention, liability, or commercial reasons, and the tool is honest about that.
Limited company accounts and Corporation Tax filings typically cost £800 to £1,500 more per year than sole trader self assessment. Set to £0 to compare tax alone.
Assumes full extraction: every pound of company profit paid out as salary plus dividends in the same year. Companies that retain profit for reinvestment defer the personal tax layer, which is where incorporation usually earns its keep. Assumes no other income, standard personal allowance, sole director with no Employment Allowance.