Sole trader vs limited company — when does it make sense to switch?

There's no magic profit figure, but you're in the zone where it's worth doing the sums — the tax advantage of a limited company typically starts to outweigh the extra admin once profits are comfortably into higher-rate territory. As a sole trader you pay Income Tax and National Insurance on all your profit; as a limited company the company pays Corporation Tax and you then pay personal tax on what you take out via salary and dividends — and you get limited liability protection too. The trade-off is more admin and cost: annual accounts, a company tax return, confirmation statement and payroll, plus accountancy fees that are usually higher than for a sole trader. Setting up is cheap (Companies House charges £50 to incorporate online), but budget for higher ongoing compliance costs each year. Given your profit level, it's worth getting a personalised comparison done — the right answer depends on how much you need to draw out versus leave in the business.