£55,000 revenue: Limited company costs around £2,597.71 per year vs sole trader

Comparison assumes £5,500.00 annual expenses (10% default), £1,200.00 accountant fees for limited company, and 2026/27 UK tax assumptions.

Updated for 2026/27 · Reviewed by James Whitfield · Methodology and assumptions

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Sole trader

Profit£49,500.00
Income tax£7,386.00
Class 4 NI£2,215.80
Net take-home£39,898.20

Limited company (salary + dividends)

Director salary£12,570.00
Employer NI£1,135.50
Corporation tax£6,800.95
Dividend tax£3,063.06
Accountant fee£1,200.00
Net take-home£37,300.49

Headline difference

Annual difference: £-2,597.71 · Monthly difference: £-216.48

Sole trader route currently looks stronger on net take-home under these assumptions.

At what revenue does Ltd become worth it?

In many cases the crossover starts around £30k–£35k profit after expenses, once corporation/dividend tax efficiency outweighs accounting and admin costs. The exact point depends on margin, extraction strategy and compliance overhead.

Useful next links

£40,000 revenue £45,000 revenue £50,000 revenue £60,000 revenue £65,000 revenue £70,000 revenue Self-employed on equivalent profit Employed equivalent salary Dividend tax on extracted profits Open full calculator

FAQs

Should I go limited at £55,000 revenue?

It depends on your profit margin, admin tolerance and long-term plans. This page compares both routes under matched assumptions.

What are the hidden costs of a limited company?

Typical extra costs include accounting fees, compliance filing, payroll setup and admin time. This estimate includes a configurable accountant fee.

How are dividends taxed?

Dividend tax applies after the dividend allowance, then by UK dividend tax bands. This page shows dividend tax separately from corporation tax.