Sole Trader, Limited Company or Umbrella? ADVICE PLEASE!

Hi,

After becoming redundant i wish to become a freelance architectural designer. I am able to draw plans create 3D Visuals and planning permissions. I believe i can earn roughly £1500 per month after tax.

I am not sure which type of company to go for. I am working for myself with no partners or employees and it will stay like that. If in 6months i take on a full time job i will hope to do this freelance work part time. I have been searching the different types of companies and this is the best i have come up with so far...


Limited Company
-Pros- Good for 2 or more people, Personal Assets are not at risk
-Cons-A lot of paperwork to do and finding an accountant can be expensive.

Sole Trader
-Pros-Good for one person stating a business
-Cons-Pay more Tax than Limited Company, Personal Assets at risk still need to find an accountant.

Umbrella
-Pros-No Paperwork or tax / NI forms to fill as this is automatically done by The umbrella company.
-Cons-Less pay for me as a lot of the income goes to tax / NI and Umbrella for there services


I seem to think that Sole trader would be my best option but then i think about personal assets and less tax then sway toward limited company.

What do you think is the best option and why?

Thanks for your time.

 

For me it was sole trader all the way because it's just so easy to set up and run. It's seriously scary striking out on your own and I wanted to just be able to fill in a form and forget about it, and do the same if it all went balls up! The tax may be more, but it's simple to keep on top of.

My fiance is in the same industry and hopes to leave his day job behind at some point, we'll probably upgrade to a Limited Company together at that point assuming my sole trader "trial run" has gone well.

Your mileage may vary

 

Speak to an accountant to decide which is the best structure for you.

 

Fantastic write-up! Walgreens Survey