Ltd company vs sole trader
At your profit level, which structure leaves more in your pocket? Compare both — with corporation tax marginal relief done properly.
The shape of the answer
Sole traders pay income tax plus Class 4 NI on all profit. Companies pay corporation tax (19%–25%), then you pay dividend tax on what you extract — but no NI. At low profits the difference is small and the sole trader's simplicity usually wins; from roughly £30,000–£40,000 upward the company route starts pulling ahead, and the gap grows with profit.
What the number doesn't capture
Limited liability (your house isn't on the line), client perception, extra admin and accountancy costs, pension flexibility, and what happens if you leave profits in the company rather than extracting everything. The calculator gives you the financial baseline; the decision deserves ten minutes of conversation — which is what our formation packages include.