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Registration as a Self-Employed Individual

Business Setup Consulting in UK

REGISTRATION AS A SELF-EMPLOYED INDIVIDUAL

Becoming self-employed in the United Kingdom is one of the simplest and quickest ways to start an independent business. This type of registration allows individuals to operate as sole traders, managing their income and expenses directly and independently. It is particularly suitable for freelancers, consultants, and small business owners who prefer a flexible and straightforward business structure.

Advantages of becoming self-employed

  • Ease of registration:The process to register as self-employed is simple, fast, and involves minimal administrative costs compared to forming a limited company (Ltd). You can become operational within a few days.
  • Less bureaucracy Unlike a Ltd, there is no requirement to file annual accounts or appoint a board of directors. Tax management is simpler, with only a personal tax return (Self Assessment) to file.
  • Full control:As a self-employed individual, you retain complete control over earnings and business decisions. There is no obligation to share profits with partners or address shareholder formalities.
  • Lower costs:Operating as self-employed generally incurs lower management costs compared to a ltd, particularly with taxes, up to a certain income threshold.

Disadvantages of becoming self-employed:

  • Unlimited liabilityA major drawback is that self-employed individuals are personally liable for the debts and obligations of their business. In case of financial difficulties, personal assets could be at risk.
  • Less business credibilityLtd companies are often perceived as more structured and reliable by other businesses and investors. If you aim to grow quickly or work with larger clients, forming a Ltd may provide greater credibility.
  • Less favorable tax regime beyond certain income levels:While self-employment offers simpler tax management, exceeding a certain income threshold may make forming a Ltd more advantageous due to lower corporate tax rates

The choice between self-employment and forming a Ltd depends on your personal and professional needs.

PAGE is here to guide you toward the best option for your specific circumstances, considering both the initial phase and the long-term growth and transformation of your business. With our support, you can confidently navigate each step with the assurance of having a knowledgeable partner by your side, fully up-to-date on UK tax and business regulations.

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