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It is vital that you choose the correct structure for your business. You can register as self employed and then register as a Limited Company, but do you know the difference?

Start simple: Go self-employed
When you’re starting out, registering as self-employed is the easiest option. You simply need to make sure you file your online self-assessment tax return by 31 January each year or by 31 October if submitting a paper copy. To get things started, you need to register for selfassessment within three months of starting your business. This is three months since your first purchase, not when you make your first sale.

Record Keeping
Make sure you keep all of your records safe too: invoices, receipts, expenses, everything. It’s easy to lose track when you’re focused on building your business, but you’ll need these records when you complete your tax return. The tax year is the twelve months up to March each year (technically the tax year actually ends on 5 April, but for your accounting purposes, 31 March is fine). So, for instance, if you registered as self-employed in May 2018, your first tax return would cover the period up to 31 March 2019. You would then need to file an online tax return for this period by 31 January 2020 or a paper tax return by 31 October 2019.

Moving on: becoming a limited company
Setting up as a Ltd company does add an extra admin burden. You need to appoint directors, register with Companies House and complete company accounts as well as your annual return. Corporation Tax also becomes something you can no longer ignore. But it can also bring tax savings, as you are able to take a dividend instead of simply taking a slice of company income home, as you would have done in self-employment. Running your business as a limited company means you have the reassurance of ‘limited liability’. Assuming no fraud has taken place, your ‘limited liability’ means you will not be personally liable for any financial losses made by your business. A limited company can therefore give you added protection should things go wrong. Once you register your company with Companies House, your company name is protected by law. No-one else can use the same name as you, or anything deemed to be too similar.