Sole Trader vs Limited Company — Business Structure
At what profit should I become a limited company in 2026/27?
Spoke 2 — the profit crossover for incorporating.
A rough crossover guide for 2026/27: - **Under ~£30,000 profit** → sole trader (Ltd advantages minimal, admin not worth it) - **~£30,000-£50,000** → usually sole trader (Ltd worth it only with spouse splitting or retention) - **~£50,000-£70,000** → break-even (Ltd ~£500-£2,000/yr saving full extraction; more with pension) - **~£80,000+** → Ltd clearly ahead (saving grows with profit, pension extraction makes Ltd materially more efficient) Ltd admin costs ~£600-£3,000/yr — exactly why crossover isn't lower. "Incorporate as soon as you're profitable" is outdated advice. **Read the full guide at [rraccountants.uk/at-what-profit-become-limited-company](https://rraccountants.uk/at-what-profit-become-limited-company).**
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