Accountant on £100,000

Personal Ltd Co. Age 40. Pension preference: aggressive.

Every figure on this page is computed at build time by the same engines that power the live salary–dividend split, take-home and SIPP optimiser calculators. Inputs come from a single CSV row; outputs come from the engines. No static lookup tables, no hand-coded numbers.

Net cash

£32,049

Pension

£60,000

Effective rate

Marginal rate

8.8%

The tax cliff this scenario is closest to

Before the numbers, a warning: a accountant at £100,000 of company profit for 2026/27 is sitting close to one of the UK tax code's sharpest cliffs.

The £50,270 higher-rate threshold and the £12,570 Personal Allowance are the two boundary numbers a sole trader at this turnover needs to watch. Each £1 of profit above £50,270 attracts the 40% income tax rate plus the 2% Class 4 NI rate — a combined 42% marginal — versus the 28% basic-rate + main-band combination below. Most "should I incorporate?" questions are actually triggered by a sole trader crossing the £50,270 boundary, because the dividend-band machinery starts paying for itself there.

The numbers for this specific scenario

Bottom line for a accountant at £100,000 of gross income: net cash £32,049; pension £60,000; effective rate on gross 8%.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£21,299
Optimum pension	£60,000
Net cash (optimum)	£32,049
Net wealth (cash + pension)	£92,049
Rule-of-thumb net cash	£66,543
Rule-of-thumb net wealth	£66,543
Saving vs rule of thumb	£25,506
Effective rate on profit	8%
Marginal rate (next £1 dividend)	8.8%

Why this scenario is different

Compared to the closest peer profile — Software contractor at £100,000 — this scenario sits £0 higher on gross income. That moves net cash by −£16,965, the pension contribution by +£24,000, and the effective rate by −7%. The shift in effective rate is large enough that the binding tax constraint has changed — probably crossing a band boundary. The optimiser shifts £19,418 of the extraction out of the dividend slice, and £24,000 into pension contributions.

Questions this scenario raises

Are dividends "double taxed" because corporation tax was already paid?

Yes — but the dividend tax rates (8.75% / 33.75% / 39.35%) are set lower than the equivalent income-tax rates (20% / 40% / 45%) precisely to account for the corporation tax already paid at company level. The combined CT + dividend tax stack is usually still cheaper than the salary stack of income tax + employer NI + employee NI for any single £1, which is why the optimiser puts most extraction through dividends.

How do I avoid the 60% taper?

For a salaried employee: salary sacrifice into pension. For a Ltd Co director: employer pension contribution. For a sole trader: personal pension contributions (which reduce adjusted net income). The taper-zone marginal of 60% means each £1 of pension contribution effectively costs the saver 40p of foregone cash — the strongest tax shelter the UK code currently offers.

Should I take dividends now or wait until next tax year?

Tax-year-end timing matters: a dividend declared in March 2027 is taxed at 2026/27 rates; one declared in April 2027 falls into 2027/28 (potentially still in the same calendar year). If your 2026/27 personal income is bunched in basic-rate territory and 2027/28 will be in higher-rate, accelerate. If the reverse, defer. The mathematical structure is "level the tax-band utilisation across years if income is volatile."

Are the engine assumptions documented anywhere?

Yes — every constant lives in src/lib/tax/constants.ts with a source-URL comment. Every engine function is unit-tested against HMRC examples (180+ test cases). The full methodology is at /about and the per-engine assumptions are spelled out at the foot of each calculator.

How is corporation tax calculated in this scenario?

At £95,004 of taxable post-pay profit, the company pays 19% corporation tax — the "small profits rate" for taxable profits ≤ £50,000.

Methodology

Income tax, National Insurance and Corporation Tax bands taken from HMRC's 2026/27 rates and allowances tables (gov.uk/.../income-tax; corporation-tax). Pension Annual Allowance and taper rules from Finance Act 2004 / 2023. Trading allowance per ITTOIA 2005 s.783A. Voluntary Class 2 figure (£179.40/yr = £3.45/wk × 52) from HMRC voluntary NI guidance.

Style: 2026/27 tax year throughout; figures rounded to whole pounds in the user-facing prose; effective rates computed as (deductions / gross). The voice is methodological — no first person, no claimed credentials, no marketing fluff.

This page is not personalised advice; for advice regulated by the FCA, consult an adviser registered with the Financial Conduct Authority. See the full disclaimer.