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Sole trader vs limited company (UK): rough take-home comparison

Enter your estimated annual profit and how you’d take money out of a company (salary/dividends). This tool gives a rough comparison of take-home as a sole trader vs running a limited company.

Calculator

This is a simplified model. Real outcomes depend on many factors (expenses, other income, pension, student loans, VAT, benefits, director’s NI thresholds, allowable expenses, accounting periods, etc.).

Annual profit before tax (£) Other taxable income this year (optional, £)

Limited company assumptions

Choose a simple “extraction” plan (how you take money out of the company).

Extraction plan If plan includes salary: annual salary (£) Do you plan to leave some profit in the company (not withdraw it)? If yes: amount to retain in company (post-tax distribution not taken out, £)

Rough running costs

Optional: add simple annual costs (accountant, software, etc.).

Sole trader annual costs (£) Limited company annual costs (£)

Best option (estimate)

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£0.00

Estimated take-home as sole trader

£0.00

Estimated take-home via limited company

Breakdown (very simplified)

Sole trader: income tax + Class 2/4 NI (approx) on profit, minus any sole trader costs entered.
Limited company: corporation tax on profit (approx) then tax on salary/dividends (approx), minus ltd costs entered.
We use a simplified “tax year” style model for comparability.

Estimates only. Not financial, tax, or legal advice. If you’re close to thresholds or have other income, get professional advice.

What this tool is best for

Getting a quick feel for whether incorporating might increase take-home at your profit level.
Understanding that extraction strategy (salary vs dividends) changes the result.
Deciding whether it’s worth speaking to an accountant.

What it does not include

Pensions, student loans, child benefit taper, VAT, expenses differences, capital allowances, IR35, dividends allowance changes, etc.
Director-specific NI nuances and payroll timing differences.
Any sector-specific rules.