A limited company is a separate legal entity. It has a requirement to submit statutory accounts each year to HMRC and Companies House and will need to file a Company Tax Return and pay Corporation Tax on its profits. A contractor who trades through a limited company is often the sole employee and shareholder.
Operating through a limited company has greater responsibility. It also incurs higher costs, by way of increased accountancy fees and insurance, however is usually the more tax efficient option, saving you money in the long run.
Don't know your trading status?
Many contractors are confused about their trading status, (are they self-employed or not?) so at a4c we decided to explain the differences, alongside the introduction of the new a4c Contractor Options Guide.
Looking to start a limited company?
Many people start out in business as a sole trader / partnership and then switch to a limited company trading status later – we’ll be on hand to explain what this means and whether it’s the right move considering your individual circumstances.
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