Creators deciding on structure
Weighing simplicity against tax efficiency.
Sole trader vs limited company calculator
Enter your expected annual profit and see the estimated take-home difference on 2026/27 rates.
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Part of our guide to creator tax guide UK.
Quick answer
This calculator compares estimated take-home pay as a sole trader against a limited company taking a small salary plus dividends, using 2026/27 UK rates. It is an indication, not advice — your pension, other income and drawings pattern all change the answer.
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Who this is for
Is this you?
Growing side hustles
Profit rising and wondering when to switch.
Freelancers with new clients
Agencies asking you to invoice as a company.
Anyone budgeting
Planning next year’s drawings and tax reserve.
Income streams
Everything we handle for you
- Platform payouts
- Brand deals
- Affiliate income
- Subscriptions
- Freelance fees
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Problems you face, answered
Tax explained
How sole trader vs limited company calculator works
As a sole trader you pay Income Tax and Class 4 National Insurance on your whole profit, whether or not you spend it.
Through a company, the company pays Corporation Tax first, then you pay personal tax on the salary and dividends you draw. The advantage grows when you can leave profit in the business.
The extra admin — accounts, Corporation Tax, payroll and Companies House filings — has a real cost, so the tax saving needs to clear it comfortably.
Source: Income Tax rates and allowances (gov.uk) · Self Assessment (gov.uk)
General information only, based on 2026/27 UK rules. Not personal advice. Speak to us about your circumstances.
Expenses
How expenses change the sole trader vs limited company answer
Allowable expenses reduce profit the same way whether you trade as a sole trader or a limited company, but what happens to the money left afterwards is different. A sole trader’s expenses come straight off self-employed profit before Income Tax and Class 4 National Insurance; a company deducts them before Corporation Tax, and what remains is then available for salary, dividends or pension contributions. Neither route lets you claim more in total, but a company can claim employer pension contributions that a sole trader cannot, which is one reason the comparison in this calculator shifts as profit grows.
Usually claimable
- Equipment, software and subscriptions used for the business
- A reasonable share of home working costs
- Business travel and mileage
- Accountancy and company filing fees
- Employer pension contributions (limited company only)
- Insurance and professional subscriptions
Usually not claimable
- Everyday clothing with no filming or business-specific use
- The private-use share of anything used personally too
- Personal drawings or dividends treated as a cost
- Fines and penalties
- Entertaining clients or contacts
Once you have a profit figure in mind, check it against the creator expenses checklist before comparing structures here.
How HMRC’s rules apply to content creators
If you are self-employed
Self-employed costs must be incurred wholly and exclusively for your trade. If you use the £1,000 trading allowance, you cannot also deduct actual expenses against that same income. Equipment treatment depends on cash basis or traditional accounting.
If you run a limited company
A limited company deducts costs incurred wholly and exclusively for its business. Equipment may need capital allowances rather than an immediate expense deduction. Personal use or company-paid private costs can create a taxable benefit or director’s loan entry; company ownership is not a blanket deduction.
For separable mixed-use costs, such as a phone bill, claim only the identifiable business proportion and keep evidence. This does not make ordinary clothing or every dual-purpose purchase deductible. A receipt alone does not prove a business purpose: retain the brief, invoice or usage record too.
Costs to review for your work
- Business-use cameras, lighting, audio equipment and editing software
- Editors, thumbnail designers, virtual assistants and licensed music
- Travel to business shoots and the evidenced business share of home-working costs
Everyday clothing, ordinary grooming, personal meals, private gaming and fines are generally not deductible. Qualifying costumes or protective clothing and business-travel subsistence have different rules. Client entertaining is generally disallowed. Receiving a product from a brand does not automatically create an expense: record the income treatment separately and deduct only an allowable business cost.
HMRC: self-employed expensesHMRC: business travelHMRC: clothingHMRC: company deductionsHMRC: capital allowancesHMRC: creator income and gifts
Keep records alongside our creator expenses checklist, or discuss your costs with our bookkeeping team.
General UK guidance, not personal advice. The deduction depends on your facts and accounting basis.
General information only, based on 2026/27 UK rules. Not personal advice. Speak to us about your circumstances.
Structure
Sole trader or limited company?
£
Sole trader£46,111
Limited company£46,091
Illustrative estimate only. Uses the published 2026/27 tax configuration. Assumes a single-director company drawing all profit, with no Employment Allowance. Excludes expenses, student loans, pensions, other income, Scottish rates and individual circumstances. Not tax advice.
Diary
Key deadlines
5 October
Register for Self Assessment for the previous tax year
31 October
Paper tax return deadline
31 January
Online return, balancing payment and first payment on account
31 July
Second payment on account
Want this off your plate?
Talk through your platform income, allowable expenses and next steps with a creator accountant.
Book your free creator tax callWritten and reviewed by
Waqas Sagar ACA FCCA FMAAT
Chartered Accountant with 18+ years' experience and founder of Accotax. Has served over 5,000 clients across London and the UK.
About Waqas SagarAccotax on LinkedIn Last reviewed: 2026-09-21
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