MT Week - Self employed vs limited company: which is right for you?
One perennial question for freelancers is whether to stay self employed as a sole trader or move to a limited company.
For me personally, it’s an issue of liability. Because I write for US clients, it’s impossible for me to get suitable indemnity insurance. Trust me, I’ve tried! But the answer has always been “we don’t have a product for you”.
This is especially worrying when many US contracts contain indemnity clauses that essentially puts all of the liability on me as the supplier.
One of the ways to get around this is to set up a limited company and supply my work that way. This protects my personal assets as, in the unfortunate event that I get sued, it’ll be my company that takes on the lawsuit.
But of course there are also tax implications of being a limited company, both positive and negative.
Given it’s tax season, I spoke to two chartered accountants from Optionis, a professional services provider, about some of the things to consider when you’re deciding whether to stay self employed or start a limited company.
Joanne Harris is the company’s head of technical, compliance and payroll while Joanne Thorne is its technical compliance manager.