Business taxes in United Kingdom: calculator for sole proprietors and companies
Choose a sector, a legal form and a tax system, enter your annual revenue and expenses — the calculator shows every tax and contribution, the total and what you keep.
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Legal forms
Sole trader Sole trader
You trade in your own name as self-employed and keep all profit after tax. Liability is unlimited: you are personally responsible for all business debts. There is no registration at Companies House.
Requirements
You can start straight away; if you earn over £1,000 in a tax year, register with HMRC for Self Assessment by 5 October after that tax year ends (free).
Keep records of income and expenses; file the online Self Assessment return and pay the tax by 31 January after the tax year ends (31 January 2028 for 2026/27); payments on account are due on 31 January and 31 July.
Making Tax Digital for Income Tax: with qualifying income over £50,000 (in 2024/25) from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028 you keep digital records and send quarterly updates through compatible software.
VAT: register if taxable turnover over the last 12 months exceeds £90,000 — within 30 days of the end of the month in which you went over.
Licences depend on the activity (selling food, street trading, playing music); working with children or vulnerable adults may require a criminal record check.
You trade in your own name. On profit (turnover minus expenses) you pay Income Tax at 20 / 40 / 45% above the £12,570 Personal Allowance and Class 4 National Insurance: 6% on profit from £12,570 to £50,270 and 2% above that. Everything goes on your annual Self Assessment return.
Conditions
VAT: you must register if taxable turnover in the last 12 months goes over £90,000; VAT is not included in the calculation.
Class 2 National Insurance is no longer paid from 6 April 2024: with profits of £7,105 or more it is treated as paid (your record is protected); below that you may pay £3.65 a week voluntarily.
The £12,570 Personal Allowance goes down by £1 for every £2 of income above £100,000 and is zero from £125,140, so the effective rate between these amounts is 60%.
Limited company (Ltd) Private company limited by shares (Ltd)
A separate legal entity registered at Companies House; shareholders are liable only up to any unpaid amount on their shares. One person can be the sole director and shareholder.
Requirements
Register online with Companies House: £100 (paper £124); you need at least one director and one shareholder (can be the same person), a registered office address and a SIC code.
Directors and people with significant control (PSCs) must verify their identity with Companies House.
Annual confirmation statement: £50 online.
Annual accounts to Companies House within 9 months after the financial year ends (first accounts: 21 months after registration); Company Tax Return (CT600) to HMRC within 12 months; Corporation Tax is due 9 months and 1 day after the period ends.
The company pays Corporation Tax on its profit: 19% up to £50,000, 25% from £250,000, and 25% with marginal relief in between. Profit paid to you as dividends is taxed as your income: above the Personal Allowance and the £500 dividend allowance at 10.75% / 35.75% / 39.35% (rates from 6 April 2026).
Conditions
VAT: you must register if taxable turnover in the last 12 months goes over £90,000; VAT is not included in the calculation.
The £50,000 and £250,000 limits apply to a 12-month accounting period of a company with no associated companies; with associated companies they are shared.
If you work for a client through your company in a way that would make you their employee without the company, the off-payroll working rules (IR35) apply and the income is taxed like salary.
The £12,570 Personal Allowance goes down by £1 for every £2 of income above £100,000 and is zero from £125,140, so between these amounts dividends are effectively taxed at 53.625% (35.75% × 1.5).
Software development, IT services, consulting for companies and entrepreneurs.
VAT Flat Rate Scheme (VAT turnover up to £150,000): you pay a fixed percentage of VAT-inclusive turnover — 'Computer and IT consultancy or data processing' 14.5%, 'Management consultancy' 14%; if goods cost less than 2% of turnover or under £1,000 a year, the limited cost business rate of 16.5% applies — typical for consultants. 1% discount in the first year.
Through your own Ltd: if without the company you would be the client's employee, the off-payroll working rules (IR35) apply and the income is taxed like a salary.
Income Tax, National Insurance, Corporation Tax and dividend tax do not depend on the sector; only VAT and licences differ.
Other business services draft — data being checked
Marketing, design, translation, engineering, bookkeeping and other professional services to companies.
VAT Flat Rate Scheme: accountancy or book-keeping 14.5%, advertising 11%, architect, civil and structural engineer or surveyor 14.5%, secretarial services 13%, business services not listed elsewhere 12%; limited cost business 16.5%.
Through your own Ltd: if without the company you would be the client's employee, the off-payroll working rules (IR35) apply and the income is taxed like a salary.
Services to individuals draft — data being checked
Household services, repairs, beauty, tutoring, photography — for private customers.
VAT Flat Rate Scheme: hairdressing or other beauty treatment 13%, photography 11%, repairing personal or household goods 10%, computer repair 10.5%, laundry or dry-cleaning 12%.
Trading allowance: up to £1,000 of gross trading income a year is tax-free; above that you can deduct £1,000 instead of actual expenses — useful for a side business with low costs (the calculator uses actual expenses).
Working with children or vulnerable adults may require a criminal record check; some activities (street trading, playing music) need a licence from your council.
Trade in goods draft — data being checked
Retail and wholesale, including an online shop (excluding excise goods).
VAT Flat Rate Scheme: retailing food, confectionery, tobacco, newspapers or children's clothing 4%, retailing not listed elsewhere 7.5%, wholesaling food 7.5%, wholesaling not listed elsewhere 8.5%.
Food is usually zero-rated for VAT; confectionery and hot food are always standard-rated.
Selling or making food — including from home or only online — requires registering as a food business with your local authority.
Manufacturing draft — data being checked
Making and selling your own products: food, furniture, clothing, handmade goods.
VAT Flat Rate Scheme: manufacturing food 9%, manufacturing yarn, textiles or clothing 9%, manufacturing fabricated metal products 10.5%, manufacturing not listed elsewhere 9.5%, printing 8.5%.
Selling or making food — including from home or only online — requires registering as a food business with your local authority.
Income Tax, National Insurance, Corporation Tax and dividend tax do not depend on the sector; only VAT and licences differ.
Assumptions
One owner, tax resident of this country, no employees, no children, no other income; the business runs for the whole year.
Lives in England (rest-of-UK rates); tax year 6 April 2026 to 5 April 2027; the company has a 12-month accounting period at financial year 2026 rates (from 1 April 2026) and no associated companies.
Company: the owner is the sole shareholder and director and takes no salary; profit after corporate tax is either paid out in full as dividends in the same year or kept in the company.
Only the standard Personal Allowance; dividends are your only income, so the first £500 of taxable dividends always falls in the basic rate band.
Expenses are documented business costs fully deductible in the year they are incurred; depreciation rules, prior-year losses and voluntary pension contributions are not modelled.
VAT (or GST/HST) and sales taxes are not included: they are passed on to clients and do not reduce profit.
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