Money Lesson Single

Sole trader or limited company?

A freelancer earning a steady profit, planned two ways: stay a sole trader, or run the same trade through a limited company. Which structure keeps more after tax over a working life?

Self Employment Expenses Savings Account ISA

Stay a sole trader

1 Goal

All the trading profit taxed as personal income: Income Tax plus Class 4 National Insurance.

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Company Expenses Savings Account ISA

Run a limited company

1 Goal

Corporation Tax on the profit, then a small salary plus dividends: the classic owner-director route.

Try this plan

Stay a sole trader Run a limited company

Staying a sole trader keeps you ~£380.6k wealthier than incorporating the same trade.