The company wins in a £350 window, by about £15 a year
Sole Trader or Limited Calculator
Run your own profit both ways on 2026/27 rates. Drawing everything out, the sole trader keeps more almost everywhere, by £4,100 at £100,000.
Sole Trader or Limited Calculator
On 2026/27 rates, drawing everything, a company does not beat a sole trader at any profit level. This shows the working rather than asking you to take that on trust.
-
Three things worth knowing
This assumes you draw everything. A company still wins where you can leave profit in it, which is a different question and the one worth asking if your drawings are lower than your profit.
Dividend rates rose for 2026/27 to 10.75, 35.75 and 39.35 per cent. Comparisons still using 8.75 and 33.75 produce a crossover that no longer exists on these figures.
The tax arithmetic is not the only reason to incorporate. Limited liability, retained profit, and clients who will not engage a sole trader are all real, and none of them is in this sum.
The crossover, in a workbook
Eight profit levels side by side with the point it turns.
Download the workbookFAQs
Can’t find the answer you’re looking for? Please chat to our friendly team.
We provide bookkeeping, VAT returns, payroll, tax filings, annual accounts, and advisory services — tailored to freelancers, SMEs, and ecommerce businesses.
Yes. Every client works with a named accountant who knows your business inside out. You’ll never deal with call centres — just direct, personal support.
We’re certified partners with Xero and QuickBooks. Our digital-first approach means you’ll always have real-time access to your financial data.
We offer fixed monthly packages with no hidden fees. Pricing depends on your business size and the level of support you need — but you’ll always know exactly what you’re paying for.
Absolutely. We handle VAT, corporation tax, self-assessments, and payroll tax. We also manage HMRC correspondence on your behalf to ensure you never miss a deadline.
No. While many of our clients are London-based, we also support businesses across the UK and ecommerce sellers worldwide through our cloud-based systems.
RESOURCES
Fresh takes on business and accounting.
Trading profit is split on a time basis. Interest, rent, gains, donations and dividends each follow their own rule, and mixing them up misstates both accounting periods.
A long period of account needs two separate capital allowances computations, and since April 2026 they are not even calculated at the same writing down rate.
Company law allows accounts to run for 18 months; corporation tax never allows an accounting period longer than 12. Here is how the split is drawn.
CONTACT
Get in touch
