Limited Company Vs Sole Trader – Your Choice

What Is A Sole Trader?

A sole trader is a term referred to someone who is self-employed and works on his own. A sole trader must register with HMRC for self-assessment.

What Is A Limited Company?

A limited company is legally a different entity to an individual and must be formed or ‘incorporated’ with Companies House.

What Is The Difference?

In a business sense there is not a great difference as the business activity does not change depending on the business structure. However a limited company has a lot more rules to follow and there is more deadlines and responsibilities to meet.

Which One Is Better?

There is not a right or wrong answer here, However, limited companies are very popular due to the flexibility it offers for remuneration planning.

What Is Remuneration Planning?

When you operate through your own limited company you just decide how to pay yourself. A combination of salary and dividends, is often the most tax efficient ways to extract profits.

I’m Not Sure Which Is Best For Me?

That’s where SME Cloud Accounting comes in. All of our fixed fee online accounting packages include free company structure advice and remuneration planning.

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