The comparison generic calculators get wrong: sole trader vs limited company for a dental associate — with the NHS pension growth you'd give up in the picture.
Income minus expenses — the number you'd pay tax on.
Roughly what proportion of your earnings is NHS work. This drives the pension impact.
Illustrative figures using 2026/27 rates and simplified assumptions — not advice, and no substitute for a proper calculation on your real numbers. Ask us for the accurate version — it's free.
NHS earnings routed through a company generally can't be superannuated, so each year in a company you give up a year of guaranteed, index-linked pension accrual. We capitalise that accrual at a conservative ×20 and net off the contributions you'd save — a rough but honest proxy for what's really at stake. The full argument is in the honest maths.
The sole trader side is income tax plus Class 4 National Insurance on the whole profit. The company side assumes a £12,570 salary with the rest extracted as dividends in the same year, so the two routes are compared on an identical amount of money reaching your pocket. Employer's National Insurance is charged at 15% above the £5,000 secondary threshold. Corporation tax runs at 19% up to £50,000 and 25% from £250,000, with marginal relief in between.
Dividends are taxed at the rates that took effect on 6 April 2026: 10.75% in the basic rate band and 35.75% in the higher rate band, each two percentage points up on the year before, with the additional rate held at 39.35% and the dividend allowance at £500. That increase is the single biggest change to this comparison in years, and it moved it against incorporation.
Using the defaults — £110,000 of profit, 60% of income from NHS work — a sole trader pays £36,889 in income tax and Class 4. The company route pays £1,136 of employer's NIC, £21,768 of corporation tax on £96,295, and £17,165 of dividend tax on the £74,526 extracted: £40,068 in total. The company is £3,179 worse off on tax alone — and that is before the pension. Sixty per cent of £110,000 is £66,000 of pensionable income, which at 1/54 accrual capitalised at ×20, less the contributions saved, is roughly £20,693 of value given up every year you stay incorporated.
This model extracts every pound of profit each year, which is the fair like-for-like test but not how every company is run. Where a company still earns its keep is retention and timing — leaving profit inside to fund a practice purchase, smoothing income across a spouse or across years, or holding back from a year when your marginal rate is at its worst. That is a planning conversation, not a calculator output, and it is one worth having before you incorporate rather than after. Read the argument in full in is a company still worth it in 2026.
These tools use sensible simplifications. A free conversation gets you the real calculation — and usually a couple of things worth fixing.
One short email a month: deadlines coming up, rule changes that affect dentists, and one number worth checking in your practice. No spam, unsubscribe any time.