vincevincevince - 3:56 pm on Dec 4, 2005 (gmt 0)

Pedant,

I'm not certain of the exact comparison, but if you had no expenses, then I believe it would be approximately the same. Remember as a Ltd UK company you would need to file annual returns (small fee) and annual accounts (slightly larger fee) each year.

Companies are taxed differently but have a really big allowance before you start paying tax, and if you are paying the majority of your profit as either earnings or expenses, then you shouldn't have to pay tax on the company's earnings.

I understand, but you should do your own checking, that if you declare as self employed, you can only deduct related expenses, e.g. domain names, whilst as a company, you can deduct even unrelated expenses, so long as they are incurred by the company in undertaking company business. e.g. buying domains you didn't use, expenses for new projects which are not yet launched / taking income, travel from your main place of work to another place for business, etc. etc.

Personally, having a company bank account and dealing with it all seperately helps to divide work and personal income, enables you to know exactly how well your company is doing (without profits and losses being blurred by your personal spending or subsidised by your personal savings).