Shall I register as a UK business?

It's been a while since I looked into this, but, as I recall, you can either be a sole trader, a partnership or a private limited company.

As a sole trader, you essentially ARE the business - it's you, trading as Your Business Name. You take the profits and shoulder the liabilities. All you really need to do to get going is tell HMRC that you're a sole trader, open a bank account and you're in business. Much the same applies as a partnership, but, subject to the terms of your partnership agreement, the partners are each entitled to a cut of the profits and share the liabilities.

A private limited company is a little more complex to set up, if memory serves. You need a director and a secretary, at a minimum, but the company is a legal entity in its own right, which shields you from liability to some extent.

VAT registration isn't compulsory unless your turnover is above a certain threshold (used to be around 50k, I think, but that was a while ago), so unless things are going really well to start with I don't think you need to worry about that right away.

As you can probably gather, it's been a LONG time since I set up as a sole trader, and the details of the other options are somewhat fuzzy to me now

Back in those days, there was a Govt funded body called Business Link that used to dish out free advice on how to set up. Sadly, according to Wiki, the local advice centres have been closed down, and even the web portal has been absorbed into the newfangled gov.uk site, but you might find some helpful hints here:

https://www.gov.uk/browse/business/setting-up

You might also find that your bank has some helpful guides to setting up a small business, though, of course, they're usually geared to selling their own services.

Hope that helps a bit, anyway!

I think you need a legal advice, not forum advice...

Really depends on what your overall goals are, how big you want to scale it, etc.

I would suggest that you talk to the people at Companies house:

Companies House

They have good advice on exactly your kind of questions, I suggest you give them a call and actually explain what you're doing now, and what your goals are for the future.

I think the main thing to note in the difference between sole trader and limited companies, is that you have more protection of your personal assets as a limited company. Say you go bankrupt for example, if you're a sole trader, the government can come after your personal assets (like your house) in order to get the money they are owed in tax. If you're a limited company, they cannot do this, only assets that are legally tied to the business, and not yourself personally would be at risk.

So talk to companies house, they are much more informed about this exact topic than most people on this forum, and it's their job to keep up to date with the laws, finer details, etc.

Hope it helps!

Nick

I've had my limited company since 2002.

I'd guess it's worthwhile if your turnover is about £10,000. Below that and it's barely worth the hassle.

There's more paperwork but (assuming you're not in a sector that has stricter rules) the only legally required expense is the annual return (about £15).

Beyond this, a company gives you greater legal protection. And there are some nice tax benefits, like being able to take income as dividends, or director's pension contributions.

Hi
I don't know if you have had your question answered already, but if not I would consider the following things. If you are earning quite well as a freelancer you can continue as you are (essentially a sole trader) and pay the Gov a healthy slice of what you earn.You have no legal protection if anything goes wrong unless you have bought into public and professional indemnity insurance, so even your TV is at risk.

If you incorporate with Companies House you can declare a £1 share and that is the entire liability of your company (check on this at Companies House - never take other peoples word for it). As a Director of your company you can arrange to pay yourself a small, living wage for which the main downside is that you would have to pay the NIC as both employer and employee. However, there is the opportunity to take out dividends and if you already have some useful equipment, you can sell that to your company.

A LTD company gives you more protection but there are more things you have to do such as keeping good accounts. You can get around this by hiring an Accountant (definitely worth doing) which may cost you £600 - £1000 a year but keep your head above water as far as Tax and PAYE go. For your own sake you can keep adequate records on Excel or buy into reasonably priced software like Accountz.

As far as VAT is concerned it is a double edged sword. On the positive side you can usually claim back VAT you have spent even if you have no 'Vatable' Sales for a particular period. It also helps improve your reputation in the business world. On the negative side it can be a pain to administer if you are not that way inclined. Accounting software usually produces a return for you and some will even have a button to submit to HMRC directly.

It all depends on how serious you want to be with your business and what your budget is likely to be. Hope at least some of this helps.

Jan