Ten years ago the pitch was simple: big dividend allowance, 10% entrepreneurs' relief waiting at the end, corporation tax under 20%. In 2026 the picture is thinner: the dividend allowance is £500, corporation tax runs to 25% (with a marginal band above £50,000 of profits), and Business Asset Disposal Relief — the exit sweetener — now sits at 18% against a 24% main CGT rate.
No — but the lazy version is. Incorporation still earns its keep in specific situations: heavily private income (where no NHS pension is sacrificed), profits you can genuinely leave in the company rather than spend, company pension contributions doing the heavy lifting, and household income-sharing where it's real. What no longer works is incorporating a predominantly NHS associate income out of habit: the NHS pension given up usually beats the tax saved, and the compliance costs eat what's left.
If you already have a company, the right question isn't "was it right then" but "is it right now" — allowances, rates and your own income mix have all moved. We re-run the comparison annually for incorporated clients; winding a company down cleanly is sometimes the best advice we give. The full workings are in our incorporation guide.
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