A limited company is a separate legal entity from you. It pays Corporation Tax (19–25%) on its profits, rather than you paying Income Tax (20–45%) on your earnings. For most people earning over £30,000 in profit, going limited saves money — sometimes a lot of it.
Sole trader vs. limited company
As a sole trader, all your profit is subject to Income Tax and National Insurance — up to 45% at higher rates. As a limited company director, you can take a small salary (tax-free up to £12,570) and draw the rest as dividends, which are taxed at a lower rate. Most director-shareholders save between £2,000 and £7,000 per year compared to operating as a sole trader on the same income.
A limited company also gives you limited liability protection — your personal assets are separate from the business.
What you need to register
- A unique company name
- A UK registered office address
- At least one director
- Share structure (typically 1 share at £1)
Registration with Companies House costs £50 and takes 24–48 hours. After that, you need to register for Corporation Tax with HMRC within 3 months of trading.
Ongoing obligations
Every year you'll need to file annual accounts, a Corporation Tax return, and a confirmation statement with Companies House. As a director, you also need a personal Self Assessment return. This is why most directors use an accountant — the penalties for missing deadlines can be significant.
What we charge
Our company formation service is £540 — fully set up, Companies House registration included. Annual accounts and Corporation Tax return thereafter is £590/year. Non-UK residents are welcome.
Ready to go limited?
We handle everything — from Companies House to Corporation Tax registration. Up and running in 48 hours.