Do You Need a Limited Company to Sell Online in the UK?
One of the first questions new online sellers ask is whether they need to set up a limited company. The short answer is no, you can legally sell online in the UK as a sole trader . But there are good reasons why many sellers eventually choose a limited company. Here is a simple comparison. Selling as a Sole Trader A sole trader is a self-employed person who runs a business in their own name. Advantages: Simple and quick to set up Less paperwork and lower accountancy costs You keep all the profit after tax Disadvantages: You are personally responsible for business debts Your business and personal finances are closely linked As profits grow, you may pay more tax than you would through a company Sole traders usually need to register with HMRC for Self Assessment and file a tax return each year. If your trading income is very small, you may be covered by the trading allowance. Check GOV.UK for the current rules. Selling Through a Limited Company A limited company is a se...