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Sole trader → limited company

Outgrowing self-employment? Go limited, without the headache

If your self-employed income is growing, a limited company can mean lower tax, protected personal assets and a more professional footing. We form the company free, set everything up, and run it with you from day one.

Am I ready? Ask us Try the calculator

Wondering if it’s time?

Tell us roughly what you earn and we’ll give you a straight answer — no obligation.

    Free company formation — a £100 value ★★★★★ Rated Excellent on Google FreeAgent Gold Partner Set up in as little as 24 hours
    Signs it’s time

    When going limited starts to pay

    Being a sole trader is the simplest way to start — but as your income grows, it becomes the expensive way to continue. You pay income tax and National Insurance on everything you earn, whether you need the money personally or not, and your personal assets are on the line if anything goes wrong.

    A limited company separates you from the business. You choose how much to take as salary and dividends, profits left in the company are taxed at corporation tax rates rather than your marginal rate, and pension contributions become a company expense.

    • Profits consistently above ~£30–40kThe point where tax savings usually outweigh the extra admin.
    • Clients or agencies asking for a limited companyMany contracts simply require one.
    • You don’t need to draw everything you earnLeaving profit in the company is where the real efficiency lives.
    • You want your home and savings protectedLimited liability keeps business risk in the business.
    How we take you limited

    From self-employed to set up — in three steps

    1

    We check it’s right for you

    Tell us your numbers. If staying a sole trader is genuinely better for now, we’ll say so — and tell you what to watch for.

    2

    We form your company — free

    Companies House incorporation, VAT and PAYE registrations, and a FreeAgent account set up and ready — usually within 24 hours.

    3

    We run it with you

    Salary, dividends, VAT, year-end accounts and your self-assessment — handled by your dedicated accountant for one monthly fee.

    Not sure what you’d take home through a company? Run your numbers in 30 seconds →

    Going limited — common questions

    When is it worth going from sole trader to limited company?
    There’s no single magic number — it depends on your profit, how much you draw, and your appetite for admin. As a rule of thumb, once profits are consistently above roughly £30–40k the tax savings and liability protection start to outweigh the extra admin. We’ll look at your actual figures and tell you straight whether it’s worth it yet.
    Do you do accounts for sole traders?
    Our monthly service is built for limited companies, so we don’t offer ongoing sole-trader accounting. If you’re ready to incorporate, we handle everything — company formation is free when you join. If you just need your tax return filed, we offer self-assessment as a one-off service.
    What happens to my existing business when I incorporate?
    Your trade moves into the new company: we form the company, register it for the right taxes, and you start invoicing through it. Your final sole-trader period is closed off through your self-assessment return, which we can prepare too.
    Will I pay less tax through a limited company?
    Often, yes — a company lets you take a small salary and dividends, control the timing of income, and claim pension contributions as a company expense. But it isn’t automatic: it depends on your profits and circumstances. We’ll give you an honest comparison before you commit. Our guide to paying yourself from a limited company shows how it works.
    How long does it take to set up the company?
    Usually within 24 hours once we have your details. We incorporate the company with Companies House, sort the registrations, and set up your FreeAgent account — formation is free when you join our service. See how to set up a limited company for the full picture.

    Ready to make the jump?

    Free company formation, FreeAgent set up for you, and a dedicated accountant from day one — for one simple monthly fee.

    Get started Ask us first