Should you trade as a sole trader or set up a limited company? This calculator compares your take-home pay under both structures for 2026/27, including income tax, NIC, corporation tax and dividend tax.
Built by UK accountants. Book a free call with COPA if you'd like personalised advice on the right structure.
There is no universal profit threshold where incorporating becomes the right choice. Compare tax, accountancy costs, administration, commercial risks and how much profit you need to withdraw personally before deciding.
No: a company pays Corporation Tax, and salary or dividends can create further personal tax and National Insurance costs. The outcome depends on profit, withdrawals and allowances; this comparison uses salary up to £12,570 plus dividends, not every possible pay mix.
Retained profit is still subject to Corporation Tax, but personal dividend tax generally arises when you take a dividend. Money left in the company is not personal take-home pay, and future withdrawals may create a further tax bill.
A limited company needs separate records, annual accounts, a company tax return and Companies House filings. Directors must also manage lawful dividends and any payroll, so include the extra time and professional fees in your decision.
Not if the company’s only employee liable for employer National Insurance is its sole director. Other companies may qualify, but check the eligibility rules before including an allowance in your incorporation plans.