When someone has been working on a self-employed basis (i.e. No - there is long standing confusion about the difference between self-employment and being a director of a limited company. Is being a company director the same as being self-employed? It can be an expensive mistake if you then have to pay someone to close it down for you (and deal with any compliance issues that have cropped up in between). It is important you understand what it means to set up a limited company and whether that is the right thing for you and your business. In some cases, due to the administrative requirements, a company is not a suitable way for new businesses to trade at all, particularly if there is only modest income involved. Running a limited company is not straightforward. You can find more information on setting up a limited company on GOV.UK. You should be very wary if someone sets up a limited company for you with other directors and shareholders as well as you. Note that if you work through your own limited company, you will probably be both the director and the sole shareholder. If you have your own company it is likely you will be the only shareholder.Ī company will usually be run by at least one director. It is owned by its shareholders, who own shares in the company.

In this situation the services you provide when you are on an assignment could be thought of as the ‘business’ of your limited company.Ī company is a legal entity in its own right, and must be registered at Companies House. Sometimes you may not really consider that you have your own ‘business’ at all but may still be asked to work through your own limited company by an intermediary in the temporary employment industry, like an agency or umbrella company (see question below). But it is not the only way – you can also run a business as a ‘sole trader’ for example, which is an individual in business on their own account, or in partnership with others, where several individuals who are the ‘partners’ run the business together. A limited company is a way of running a business.

Joining a small business tax write off