Free tool. Updated for 2026/27
Sole trader or limited company? Get a straight answer.
Most calculators give you one number and leave you guessing. This 30 second check uses current 2026/27 tax rates, then tells you in plain English what it means for you.
Two questions. One clear answer.
No email. No sign up. Move the slider, pick what matters, get your number.
Find your best business structure.
Answer a few quick questions. We will weigh up sole trader against limited company for your situation, then show you the pros, the cons and one clear number.
Where are you now?
What is your yearly profit?
What is left after costs. Not your total sales. A rough number is fine.
How much of that profit do you need to live on?
This is the big one. Money you leave in a company is taxed far less than money you take out.
Could a husband, wife or partner own part of the business?
A second owner gets their own tax free amounts.
Do you work mostly for one or two clients, like a job?
This is the IR35 question. It can change the answer a lot.
Do you want to pay into a pension from the business?
A company can do this in a very tax friendly way.
Do you think you will sell or exit one day?
How much do you care about protecting your home and savings?
A company keeps your personal money separate from business risk.
How do you feel about paperwork?
Calculating your optimal structure
Where it comes down to your detail
Discuss your optimal structure with an expert. A free 20 minute call with Daniel of DG Accountancy.
Daniel is ACCA qualified, one of the top levels an accountant can reach. Pick a time below.
Free. No pressure. No sales pitch.
What changed for 2026/27
For years the answer was simple: make enough profit and a limited company wins. That is no longer true for everyone. Here is what moved.
Dividend tax went up
From April 2026, basic rate dividend tax is 10.75% and higher rate is 35.75%. Both rose by 2%. Taking all your profit as dividends saves less than it used to.
Your tax free amount is frozen
The £12,570 personal allowance is frozen until 2031. As prices and pay rise, more of your income slips into tax. This hits sole traders hardest.
Sole traders have more admin
From April 2026, Making Tax Digital means many sole traders must keep digital records and report to HMRC more often. That narrows the old cost gap with companies.
Company tax is not flat
Corporation tax runs from 19% up to 25%, with a 26.5% band in between. The more your company makes, the higher the rate on that slice.
What a number can never tell you
Tax is only part of the choice. These are the things that often decide it, and no calculator can weigh them up for you.
Protecting what is yours
A company is separate from you in law. If things go wrong, your home and savings are usually safer than they are as a sole trader.
Pensions and money left in
You do not have to take all your profit out. Money paid into a pension, or kept in the company, is taxed far more lightly than dividends.
The IR35 rule
If you mostly work for one client, like a job, IR35 can wipe out a company’s tax saving. Only a proper look at your contracts can tell you.
Bringing in family
A husband, wife or partner can own part of a company and use their own tax free amounts. That can change the answer a lot.
Want a real answer, not a guess?
Whether you want to build wealth, handle money better, or save tax so you can pass more to your family, 20 minutes with Daniel gives you the answer. He is ACCA qualified, one of the top levels an accountant can reach.
Book your 20 minutes with DanielFree. No pressure. No sales pitch. Just a straight answer.
Sole trader vs limited company
This page and the tool on it give general information for the 2026/27 tax year (England, Wales and Northern Ireland). It is not tax advice, and your own position will differ. Please speak to an accountant before you act. Read our Terms and Conditions and Privacy Policy.