So you want to start your own business, here are some things to consider

If you're reading this, it hopefully means that you are considering starting your own business, congratulations.

In what should be very exciting times, knowing where to start can be quite overwhelming. One of the first decisions to be made, are whether to go self employed or start a Limited Company, here I have listed the key points to consider in making this decision:

Self employed	Limited Company
ADVANTAGES	ADVANTAGES
This is the far simpler option, once you make this decision, you can start working once you are ready (ensure you check which insurances you will need and get these in place first). Once you start your business, you need to register for self employment with HMRC by 5th October following your first tax year. You will need to register with HMRC also for PAYE if you will have employees earning over £123 per week or for VAT if your annual income will exceed £85,000.	​Becoming a Limited Company can appear more professional which can be important depending on your line of work. A Limited Company is also classed as a separate legal entity to yourself.
If the nature of your business involves you sometimes working from home, it's much easier to claim for this and you can apportion house hold bills or use a simplified expense calculation depending on the number of hours spent per month.	Registering your Company means that your Company name is protected once it's been processed by Companies House so your business name is unique to your Company.
Being self employed means that your personal details are kept private.	There can be tax savings to be made when operating via a Limited Company, this can be quite a complicated process with balancing it all.
​DISADVANTAGES	​DISADVANTAGES
You can be chased personally for debts if your Company is unsuccessful or sued.	There is so much more involved in running as a Limited Company. Initially creating the Company, registering with Companies House, registering with HMRC for the relevant taxes (e.g. Corporation tax, PAYE
It can lead to more tax being due on larger profits.	As a Director, your personal details will be publicly available on Companies House. You can pay for a registered office address that is not your personal one however if you don't wish to share your home address online.
May be viewed as less professional than a Limited Company.	Ensuring that your Company is running in the most tax efficient way can be a complicated process. Withdrawing dividends can be the best way to withdraw funds however this can only be done when the company is earning profits.
	If you work from home, it can be much harder to claim for this if you are a Director. You can create a rental agreement between your Company and yourselves as the property owner, however this would then lead to additional income that would need to be declared and could lead to a capital gains tax charge if you came to sell your property. ​

Overall, the decision is down to you and your preference. In my experience, people that aren't in a particularly risky trade and aren't looking to turn over £100,000s, prefer the simplicity of self employment. If you need any help with talking through your options, please get in touch.