Sole trader vs Limited company

The ultimate dilemma - which is right for you?

It’s the first question new business owners ask themselves – should I be a sole trader, or a limited company? There are many different factors to consider when deciding your company legal structure, such as profitability, liability, HMRC and Companies House paperwork.

If you’re on the fence about whether to be a sole trader or limited company, we can help you get the facts.

By joining Crunch
your take home pay would be

£ 
you could save £ 
per year

Call us on 03332 229 832

or request a callback

By joining Crunch
your could save

£ 

Call us on 03332 229 832

or request a callback

Call us on 03332 229 832

or request a callback

Request a callback


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How much will you save?

Whether you’re a sole trader, limited company, or using an umbrella you could save money by switching to Crunch.

Our flat monthly fee keeps your costs low, while our online accounting software constantly monitors your income and outgoings to make sure you’re as tax-efficient as possible.

To see how much you could save, use our Take Home Pay Calculator, and then get in touch with one of our expert advisors for a detailed breakdown of your savings.

Where you could benefit

 
Limited Company
Sole Trader
Limited liability? Legal and financial protection for you personally if your business goes under
Ltd Company
Sole Trader
Bigger client pool? Potential for gigs at financial service providers and others who require business-to-business contracts
Ltd Company
Sole Trader
Self Assessment? Requirement to file a Self Assessment with HMRC every year?
Ltd Company
Sole Trader
Borrowing power? A separate credit rating for your business to borrow capital
Ltd Company
Sole Trader
Exit strategy? Can you bundle up your business and sell it on?
Ltd Company
Sole Trader
 

Things to consider

 
Limited Company
Sole Trader
Public information Will your information as a company director be publicly viewable?
We'll be your registered address
Ltd Company
Sole Trader
IR35 Could you be caught under HMRC's disguised employment legislation?
Calculate your IR35 risk
Ltd Company
Sole Trader
Year End accounts Requirement to file Year End accounts with HMRC and Companies House?
Our software will handle all your returns
Ltd Company
Sole Trader
 

Unsure about which option is right for you? Call us on 03332 229 832 or Request a callback

Frequently asked questions

Is forming a limited company difficult?

No – in fact it can be done in about 10 minutes! You’ll need to provide some personal information to help identify yourself to Companies House as the director.

Is switching from sole trader to limited company difficult?

No – as each are legally separate entities it’s simply a question of forming a company and conducting business through it from then on. You can be up and running in a matter of hours!

What’s the difference between “Limited” and “LTD”?

Nothing – both are used to denote a limited company. It’s up to you which you use.

Can you switch back from Limited Company to Sole Trader?

Yes! You can just shut your company down and return to sole trading – however it could make your Self Assessment for that year a little trickier.