Choosing the right business structure is crucial for your success. Compare limited company vs sole trader benefits, tax implications, and administrative requirements.
You are the business. Simple structure where you run your business as an individual, keeping all profits after tax.
A separate legal entity from you. Offers liability protection and tax advantages, but requires more administration.
20-45% Income Tax on profits
19-25% Corporation Tax on profits
Unlimited - personally liable for business debts
Limited - company is separate legal entity
Simple Self Assessment tax return
Annual accounts, confirmation statement, corporation tax return
£0 - just register with HMRC
£12-£100+ Companies House registration
Class 4 (9% + 2% on profits); Class 2 no longer compulsory
15% Employer's NI on salary (if applicable)
Take money freely - it's all yours
Salary + dividends (more tax efficient)
Your business = you, less paperwork
Company details publicly available on Companies House
Personal brand
Ltd suffix adds professional credibility
Annual profit of £60,000 - which structure saves more tax?
Limited company saves £2,294 per year in this example!
*This is a simplified example. Actual tax depends on individual circumstances.
Consider these factors when choosing your business structure