Must I Register (as) a Company to Work Freelance / for Myself (in the UK)?


2

I would like to know whether or not I must register (as) a (limited?) company in order to provide services, or if I must register for self assessment; I'm a little confused about this and am not sure which option is "correct"/"most suitable".

(FYI: the "services" in question lie within the data analysis field.)

I expect the whole process to work as follows:

  • Advertise my services;
  • Clients come to me with work;
  • I carry out the work and charge a fee

I am unsure what to do with regards to tax arrangements; should I register a company or complete a self assessment at the end of the year? Or is there something altogether different which is more appropriate?

At present, I am working full-time and will be doing this work as an aside (I assume the term "freelance" applies here); however, at first, I expect business to be slow/quiet but if it picks up, I hope to be able to do this full-time.

Any advice (and references/sources) would be greatly appreciated.

Company Tax

asked Oct 11 '13 at 17:10
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Snooker Fan
113 points
  • No, you have several alternatives. You can register as self-employed with HMRC, or you can form a partnership (limited or not). The issue you may have is that clients tend to prefer dealing with Ltd companies and not deal with you as a self-employed sole trader (they are afraid of tax/NI bills and you being deemed an employee). Whichever option you choose, you will probably need to do the self-assessment tax return thing (trivial). Freelance means like "professional" used to mean, before it was diluted, in that you work as a gun for hire, not an employee. Check out http://hmrc.gov.uk for info. – Steve Jones 7 years ago
  • Great, thank you. So if you personally had to opt for one of the above options, which would it be? I assume setting up a Ltd company? – Snooker Fan 7 years ago
  • Definitely a Ltd company. They are trivial to set up (see http://www.companieshouse.gov.uk for details), easy to run and the "Limited" aspect is useful too, in that your personal assets are protected from business debts, assuming no fraud is involved. – Steve Jones 7 years ago
  • Thank you for your advice, Steve. If you would, post both responses combined as an answer and I will duly accept. – Snooker Fan 7 years ago

1 Answer


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Comments re-posted as Answer: You have several alternatives when starting a new UK business. As well as the Ltd company route, you can register as self-employed with HMRC, or you can form a partnership (limited or not). There is also the plc route, but this is much less likely to be applicable here.

One issue you may have is that UK clients tend to prefer dealing with Ltd companies and not deal with you as a self-employed sole trader (they are afraid of tax/NI bills and you being deemed an employee).

Whichever option you choose, you will almost certainly need to do the self-assessment tax return thing (trivial). HMRC are very helpful and do their best to make it easy. See here for their business pages and here for Self-Assessment.

I would always recommend a Ltd company, see the Companies House website for details on how to start one. Ltd companies are easy to run and the "Limited" aspect is useful too, in that your personal assets are protected from business debts, assuming no fraud is involved. Check here for details of Corporation Tax on the HMRC website.

As an aside, Freelance means like "professional" used to mean, before it was diluted, in that you work as a gun for hire, not an employee. End of aside.

answered Oct 11 '13 at 21:11
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Steve Jones
3,239 points

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