Explain What a Limited Company Is and Whether You Need One as a Freelancer

You are earning enough as a freelancer that you keep hearing you should look at going limited. The tax savings are real at a certain level, but so are the additional obligations. This explains the key differences, the income threshold where incorporation typically starts to make financial sense, the administrative requirements that come with a limited company, and the three questions to take to an accountant before deciding.

Explain the difference between operating as a sole trader and setting up a limited company for someone who has been freelancing as a sole trader for a year or two and is wondering whether to incorporate. Cover: what a limited company is and the key differences from sole trading; the tax advantages and thresholds at which incorporation typically becomes beneficial; the administrative obligations that come with a limited company (annual accounts, confirmation statement, corporation tax); the liability difference between sole trader and director; and the practical test: at what income level and in what circumstances does incorporation typically make financial sense. End with the three questions worth asking an accountant before making the decision.