One big decision for any new start-up is whether to register the business as a sole trader or limited company? It is a common question that many new business owners will face, and this article breaks down the two options for you.
Registering as a sole trader means that you have complete control of the business whether you employ others or not, you will also keep all the profits after tax. Instead of paying corporation tax and paying yourself a salary the profits you make are your salary – you will of course have to pay tax just as you would on any other income.
A limited company on the other hand means that you will be registering a business name that you will work for, and in this case, earn a salary from. Any profits you make belong to the company and will either come in as a salary, dividends, or loan.
Your business goals and strategies will determine which option you decide to take. If for example you are making your own products and selling them at markets or online via websites such as Etsy or Ebay, but you have another job then registering as a sole trader would be the most beneficial.
It is quick and simple to do, and it is also tax-friendly which is important for you to make a profit and a success of the business. A sole trader is perfect if you are just starting out. Depending on your future success you can register as a limited company later down the line.
Registering as a sole trader needs to be done before the end of the tax year and before October 5th where you need to submit a tax return. Remember, there is a certain amount you can earn before HMRC will expect you to pay tax – this is called a trading allowance.
If you are earning above this allowance, then you need to complete a self-assessment tax return which can be done by registering online or by posting the relevant information to HMRC which you can download from the official HMRC website.
Registering your business as a limited company is usually done via Companies House and you have the option to purchase a ready-made company name, or you can form your own company. You also need to appoint a company director who must be over 16 years old and cannot have been bankrupt or disqualified from directing a previous company.
If you are starting a new business and need some advice on whether to register as a sole trader or limited company then our team of highly trained business consultants can help you with all aspects of your small business. If you would like to know more about how we can help you why not get in touch with the friendly team here?
Looking for our accounting services?
EXCELLENT Based on 36 reviews Lucrezia Zanin2024-04-25Trustindex verifies that the original source of the review is Google. Thanks to Muhammad who has been guiding me through any tax question I had and helped with my yearly return. Highly recommended! Lauren Le Franc2024-03-21Trustindex verifies that the original source of the review is Google. Professional, sound advice and diligent. Helped with VAT, PAYE and general accounts. Great service. Pinku Goswami2023-10-13Trustindex verifies that the original source of the review is Google. Good and excellent service Gavin Ballack2023-10-12Trustindex verifies that the original source of the review is Google. Very Efficient and Effective Accountant. Solaiman has excellent communication and his been working with us for over 2 years. Highly Recommended!!! adnan ahmed2023-10-09Trustindex verifies that the original source of the review is Google. I must express my utmost satisfaction with the level of professionalism, expertise, and dedication demonstrated throughout our engagement. I wholeheartedly recommend Stan Lee to anyone seeking not just an accountant, but a financial adviser who is dedicated to the success and well-being of their clients. Aslihan İbrahim2023-10-02Trustindex verifies that the original source of the review is Google. Güvenilir, dürüst ve iyi servis. Kendisi ile çalışmaya başladıktan sonra işlerimiz daha verimli ve doğru bir şekilde yönlenmeye başladı. Kesinlikle tavsiye ederim. Hamza Khan2023-05-03Trustindex verifies that the original source of the review is Google. Thank you Mr Solaiman for always handling my tax queries and always being there for first response! Martin Irudayaraj2022-11-18Trustindex verifies that the original source of the review is Google. Good respect my last review was bad experience but he came to me and talk to me explain what happened and sort out my issue and offer me free service for 3 months He is definitely professional respect his Clint’s and help them . Will recommend to my friends. The Stig2022-10-07Trustindex verifies that the original source of the review is Google. Thank you very much Mr Solaiman for coming back to me and for answering my queries. I can only imagine how busy it must be for you, especially at this time of the year. I shall definitely consider using your services at some point in the future and making sure that I have all the necessary paperwork in order for you to process everything smoothly and proficiently, ready for submission. Making it easier and less stressful for you. Travel Gateway2022-07-07Trustindex verifies that the original source of the review is Google. Stan Lee Accountancy Ltd is highly recommended. Muhammed’s been taking care of my ATOL return and I can honestly say he has been incredibly professional.
We are required by our professional bodies to have separate entity and therefore, there are two firms involved. Both firms are required to have Professional Indemnity Insurance (details of the PII available in our office upon request).
Registered Office: Level 18 | 40 Bank Street | Canary Wharf | London | E14 5NR
© All rights reserved 2019 - 2024
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |