Sole trader or limited company

Where you are now

Starting a businessNot registered yetAlready a sole traderThinking about a company

Profit and taxMy profits are growing, or I expect them toI don't need to take all the profit out each yearI need most of the profit to live on

RiskThe business takes on contracts, stock, premises or borrowing that could leave large debts

Clients and how you workClients or agencies ask me to work through a limited companyI work for one or a few clients, in a way that looks like employment

Admin and moneyI'm prepared for more admin each yearI would rather my business figures stayed privateI sometimes use business money for personal spendingI want to know what each structure costs to run

VAT, pensions and borrowingMy taxable turnover is near £90,000I want to pay into a pension through the businessI plan to apply for a mortgage or personal loan soon

To discuss with an accountant

Your list

See how salary and dividends compare in our salary vs dividends calculator.

General guidance, not advice

This lists general points from GOV.UK guidance on business structures at 27 October 2026. What you see above comes only from what you ticked. It does not work out your tax or decide which structure suits you; that depends on your figures and plans. Tax rules and rates change, so check current guidance on GOV.UK.

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