Answers
Sole trader or limited company?, Below roughly £30,000 to £40,000 of profit, sole trader is usually simpler with little tax difference. Above that, and especially where profit is retained, a company generally wins. Liability and client requirements often decide it first.
What is the difference between an LLP and a limited company?, An LLP is tax transparent, so members pay income tax on allocated profit. A company pays corporation tax and owners pay tax only on what they extract, which is better when profit is retained.
When should I set up a holding company?, When there is a commercial reason: separating property or cash from trading risk, holding several trades, or preparing a subsidiary for sale. Remember each associated company divides the corporation tax thresholds.
Which structure should a social enterprise use?, A CIC to trade commercially and pay directors, a charity for tax exemptions and grant access, or a company limited by guarantee where no one should own value personally.
Can I change structure later?, Yes, and many businesses do. Transferring a trade triggers capital gains, stamp duty and VAT consequences, so plan it before invoices start coming from a new entity.
Does the structure affect what I can claim?, The allowable expense rules are broadly similar, but the mechanics differ, for example mortgage interest on residential property is fully deductible in a company and restricted to a 20% reducer personally.