Sole Trader vs Limited Company Tax Calculator: Which Saves You More?

Tax Guides · 9 min read · Updated 2026-03-22

Compare the tax implications of operating as a sole trader versus a limited company in the UK. Use our calculator to see which structure saves you the most money.

Written by Krishna, Founder & HMRC-registered tax agent at TaxRoot.

At what income level should I switch from sole trader to limited company?

Most accountants recommend considering a limited company once your annual profits consistently exceed £35,000 to £40,000. At this level, the tax savings from the salary-plus-dividends strategy typically outweigh the additional costs of running a company. However, the exact tipping point depends on your personal circumstances, including other sources of income,…

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