Choosing between being a Sole Trader or a Limited Company depends on various factors such as liability, tax implications, administrative requirements and your long-term goals.
As a sole trader you have complete control over your business and its profits, but you are personally liable for any debts or legal issues.
Taxation is simpler, paying taxes through self-assessment, but you may end up paying higher taxes than a limited company.
On the other hand, a limited company provides limited liability protection, meaning your personal assets are separate from the company’s liabilities.
Taxation can be more complex but you may benefit from lower tax rates and various tax planning opportunities.
Administrative and bookkeeping requirements are more intensive, various companies house requirements and laws must be adhered to and accounts must be filed annually.
It is important when considering the options the level of risk associated with your business as this may dictate whether a Limited Company is the best choice for you.
Also a key consideration is the additional admin involved with running a Limited Company compared to being a sole trader and whether you will do some of these tasks yourself or outsource.
Want to have a chat about this in more detail ? Get in touch the team at Elevate on 01978 803 000.
