Anyone self employed?...did you register as sole trader or company director? Which is best?

[SapphireBattersea]

I am in the process of going self employed, I will be working on my own to start with but if my business becomes busier I will look at employing someone, however that will be a lot further down the line!

I only started in October so will need to do my tax return between (I think - end of march 2019 and January 2020) and have only earned about £1000 since then so it is really small atm :D ...however my client base is building slowly and I am hoping it might lead to something a bit bigger

I have spoken to an accountant for some initial advice and basically he says these are my 2 options.

So just wanted to hear from MNERs who are in or have been in similar situations when starting up a business and ask which option you went for. and what are the positives and negatives of both options

(tbh I like the idea of being able to call myself a company director :D)

TIA

I think it has something to do with liability. As a sole trader if you mess up the client will come to you for the money. In theory you could lose your house.

If you are a limited company the company is liable and so in theory your house is safe.

That was how it was explained to me 10 years ago.

There are some good websites and government websites that explain the differences but I cannot remember where I looked because it was so long ago.

Good luck.

Silly, that is exactly right although a lot of us sole traders have insurance cover (and I have never been sued in 20 years either) and some people who are worried about creditors find they have to give the bank a personal guarantee anyway as they want an over draft for the business so end up without as much limited liabiilty as they hoped in the first place.

You have the right sort of insurance policy, but remember that you will need to extend it to employer's liability cover as soon as you take anyone on. Do you keep client keys at home? If so, I would consider telling your home insurance company. Do you also have business cover on your car insurance now?

I'm in a similar position to Xenia (who is also appropriately qualified to give advice)and have never bothered incorporating. I have more than enough insurance cover and no business debts, so incorporation is fairly irrelevant. Stick with being a sole trader. You should inform HMRC that you are self employed by 5 October 2019 if you started trading after 6 April 2018. If you started trading before then, you've missed the deadline & need to get your self assessment tax return sorted out asap.