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Better off self employed or ltd company

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Part Timer

It depends on your circumstances, tax rules have changed regarding dividends. It was, before the tax changes, better to be Ltd, I doubt it is now as there is additional costs involved. Best thing is to have a word with an Accountant and talk it through with him. If you are married / partner then using their tax allowances is as best as you can probably get nowadays. 

I run a Ltd Company and am also a sole trader. My Accountant use to try and get me to put the sole trader side, windows, in with the Ltd Company. He didn't push me last year so I assume he doesn't think it's as advantageous as it was. 


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The accounts I use are useless they done explain anything and have been meaning to change for years but as I leave my tax return to last min I don’t have time

I’m 26 now and want to get a mortgage but have heard and read a lot about being self employed hard to get a mortgage

And was thinking ltd I think I would then be classed as a employee I think

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Iron Giant

Not hard at all really, the mortgage provider requires a hmrc form which your accountant can print off If you call into his office.

Off the top of my head I can't remember what the form is called, but it's the only accepted proof of income that I mortgage lender will accept.

I have been self-employed for almost 18 years and never had an issue with mortgage applications, my wife who has worked for the county council for over 10 years had more of an issue when we decided to move house because of her varied hours and pay enhancements it was like trying to decipher a code

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It depends on what you wanted to do and where to get to.

If your happy and the goal is to earn a good living for yourself then stay as self employed

If you want to grow and build something bigger you need to be ltd

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We were Ltd for several years.  Previously the rule was that the company paid Corporation tax and you took dividends after that tax was paid so it was advantageous to be Ltd.  Now not only does your company pay Corporation tax but you also pay tax on your dividend, so you get taxed twice.


When they brought that in our accountant advised us to dissolve the Ltd Company and form a partnership (myself and my wife).  Not a great deal of difference financially but save on the extra paperwork and admin of a Ltd Company.  The only reason I can see for being Ltd is if you are operating with a lot of financial backing - if you go bust you can't be personally responsible for the debt, but how many window cleaners need thousands of pounds of finance?

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Looked into this in detail


And for me im going to go LTD at some point, but not just yet.


The main reason being i want to build the business and keep building it as a seperate entity, im happy to take a salary.

I want to build the business so it funds itself, as in money comes in, money gets re invested for growth and round we go. 


The thing is once you start adding vans and employees and taking out finance for vans and loans etc, you are better keeping the liability with the business than being personally liable. Not to mention its a bit more tax efficent. 

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