Thank you very much for visiting the blog, just to clarify English is not my first language. But love accounts and accounting language is.

What is the difference between the self-employment and limited companies?

Which for you should choose to run your business?

Everything depends from what is important to you, nature of your business and how high ids your revenue.

First and for most one of the variable you need to look at is professional look, In the business world it seems more professional to have Ltd after the company name, I thinking that this should not matter and especially for creditors working with sole trader would give a little more protection.

For the person starting business there is important factor of protection, security and lability and to be honest I think this is why I would mostly advise working as limited company. When you ran a company as self-employed you are fully liable for debt of the business – if your business going under – you are going under. The Limited Company is separate entity and directors can only be liable for the company debt if he failed to fulfil director duties (performed inappropriate actions).

Choice of the form which you run your business in would also determinate how much personal tax you would pay, usually you need to start looking at this when your revenue exceed £30,000.

Running bookkeeping and accounting for self-employed is much easier and there is many simplified expenses where HMRC the self-employed can take advantage from. At this point of time once a year self-assessment need to be filed to HMRC (there is a change coming soon- I would explore Making Tax Digital on this blog soon).

Another point to make is how easy it is to set up self-employment I think this is another small advantage of being a sole trader.

Protect your business name Limited Company can register the name and trademark.

Are you a private person – if you are director of Limited Company your information would be published in Companies houses website as well as accounts of the your business there is no such as exposure when you self-employed.

It is sometimes very difficult to choose the business structure, I would say that there are some businesses where self-employment is risky.

I would not advise self-employment where there is high volume of stock especially where there is fluctuation of price, where you are exposed to law suits, where the trademark is important.

I would not advise as limited company to any company where turnover not exceeds 10k or £20k you in service market (under the condition previous paragraph do not apply).

Thank you for a read.