On your path to becoming a professional Creator, you may have seen that a few of your peers have opted to set up a limited company for their income - rather than just register as self-employed. There are a few reasons why a Creator might make this decision; but you might not really be sure if it's the right call for you!
Sam Uwins, Accountant for Social Influencers and Online Content Creators at MHA Carpenter Box, will hopefully be able to clear things up...
What are the main differences?
Being registered as self-employed with HMRC involves registering online or over the phone as an individual.Essentially, you are notifying HMRC that you are operating a business, and that you are receiving income that hasn't yet been taxed.
Following this, you will be required to complete a tax return once per year. The tax year runs to the 5th of April every year, and you have until the following 31st of January to file and submit a tax return. We're currently in the tax year that will end on the 5th of April 2019, often referred to as the 2018/19 tax year; and the tax term for this year will need to be submitted by the 31st of January 2020.
A limited company needs to be registered with Companies House, which is a separate government organisation from HMRC. A limited company is a stand alone legal entity from yourself as an individual; you may be registered as the director and the shareholder of the company, but in the eyes of the law - in relation to tax and other laws - a limited comp