Oh, the things to think about!! And where do you actually start?
You could be transferring to Ltd from being a Sole Trader OR you may just go straight in as a Limited Company from the off.
Personally, due to the extra paperwork being involved with setting up a Company (as in Ltd) I’d start as a sole trader to see how you find things initially.
Those are just my thoughts though. Plenty of people do go straight in as Ltd.
No ties
When you’re Ltd, you would become the Director of your company. There are no ties to anything that you own personally. The Company is its own entity.
Whereas being a sole trader, you are personally liable for any losses or debts.
Payroll
Directors would normally be on the payroll, so you would need to include some kind of payroll software in your expenses. If you are the only employee, there is no need to include auto-enrolment for pensions. You would be exempt.
Registering
So, to register as a Limited Company you would need to do this via Companies House and state who the shareholder(s) would be.
Each year you would need to submit a Confirmation Statement at a cost of £12 (as of writing this in 2022) this is to confirm that all is as per the records held or update if necessary. This would be submitted via Companies House. This link takes you straight to where you need to be to register.
If you have an agent acting on your behalf, they can register for you and obtain all of the necessary codes.
Get your code
Before you can submit your confirmation statement, you need to apply for a code. This code is sent to you in the post so make sure you register in plenty of time so that you don’t miss your deadline and receive a fine.
When you register as a Limited Company it is also best to register for Corporation Tax, this is then all set up ready for when you need it.
You have 9 months to submit your Year End accounts from when your financial year ends. You will have time to appoint an accountant to submit these for you. This isn’t something you can sign off yourself. This is on the understanding that your accounts are all up to date and tidy.
TIPS:
You can be more tax efficient. Many owners pay themselves a combination of salary and dividends as the dividends have a lower tax threshold.
Personal assets are protected.
You’ll have less privacy due to having to submit your Year End accounts. These are displayed and publicly available on Companies House.