If you freelance in the UK, going limited turns your one-person business into a separate legal company. It costs £100 to register online, usually takes under 24 hours, and can save tax once profits grow — but it adds paperwork. Here is when it pays and how to do it.
Should You Register as a Freelancer at All?
As a sole trader, you and your business are the same legal person. Your profits are taxed as your personal income, and your personal assets are on the line if the business runs into debt. A limited company is a separate legal person: it owns the income, pays its own tax, and generally shields your personal assets.
| Sole trader | Limited company | |
|---|---|---|
| Legal status | You are the business | Separate legal person |
| Tax | Income Tax on all profits | Corporation Tax on company profits, plus personal tax on what you take out |
| Liability | Personal assets at risk | Generally limited to the company |
| Admin | One tax return a year | Annual accounts, confirmation statement, company records |
| Image with clients | Fine for most freelance work | Some larger clients prefer dealing with a company |
Going limited usually starts to pay once freelance profits regularly pass around £30,000 a year — a rule of thumb, not a law. Below that, extra admin can eat up the tax saving, though keeping most profit in the business to grow it can still make limited sense earlier. A quick chat with an accountant before you switch is money well spent.
One honest warning: limited does not mean zero risk. Banks and landlords often ask directors for a personal guarantee, and directors can still be liable if they trade while knowing the company cannot pay its bills.
What It Costs to Register in 2026
Companies House fees changed in February 2026, so ignore older guides that still quote £50.
| Route | Cost | Timing |
|---|---|---|
| Online, direct with Companies House | £100 | Usually within 24 hours |
| By post (form IN01) | £124 | 8–10 days |
| Through a formation agent | £100 plus the agent’s fee | Usually same or next day |
After that, budget yearly: the confirmation statement is £50 a year online, plus an accountant’s monthly fee for accounts and tax returns. Accounting software is often bundled in. None of these are huge, but they are why going limited only pays once your income justifies them.
What You Need Before You Start
Gather these before you open the Companies House form, and the whole thing takes under an hour:
- A company name that is not already taken and does not use a sensitive word such as “Royal” or “Bank” without permission. Check it on the Companies House register first.
- A UK registered office address. This goes on the public register, so if you work from home and value your privacy, use a registered office service or your accountant’s address rather than your home address.
- At least one director, aged 16 or over. You can be the only director. There is no UK residency requirement.
- At least one shareholder. That can be you as well, usually holding a small number of £1 shares.
- A SIC code describing what you do, for example consultancy, design or IT services.
- Articles of association. Most freelancers use the government’s standard “model articles” — they are fine unless you have unusual arrangements.
- Details of people with significant control (PSCs). Anyone holding more than 25% of the shares or voting rights must be declared. For a solo freelancer, that is you.
- Identity verification. Every director and PSC must now verify their identity through GOV.UK One Login and receive a Companies House personal code. You only do this once, and it is free.
How to Register, Step by Step
- Verify your identity. Do this first through GOV.UK One Login and keep your personal code safe — you will need it during registration.
- Choose and check your company name. Search the Companies House register to make sure it is free and does not clash with an existing name or trademark.
- Decide your registered office and service addresses. Your registered office is public; your service address (where your mail as a director goes) can be different, which helps protect your home address.
- Set your share structure. Keep it simple: 100 shares at £1 each, all owned by you, is the standard solo-freelancer setup.
- Fill in the online form. You will enter the director and shareholder details, the SIC code, the articles and the PSC information, then pay £100 by card.
- Wait for your certificate of incorporation. This usually arrives within 24 hours and confirms your company legally exists, with its company number and date of formation.
- Set up the money side. Open a business bank account in the company’s name, and make sure Corporation Tax is set up — the online service usually does this at the same time, unless your company is dormant. You must register for Corporation Tax within 3 months of starting to trade, and you will receive a 10-digit Unique Taxpayer Reference (UTR) for the company.
If you want the general process explained without the freelancer angle, read our step-by-step guide to register a limited company in the UK.
The IR35 Point Freelancers Must Not Miss
If you work through your limited company for medium or large clients, the off-payroll working rules — usually called IR35 — may apply. The client decides whether your contract counts as employment in disguise. If it does, you are taxed much more like an employee, which can wipe out the tax advantage of going limited for that contract.
This does not make limited a bad choice, but check the status of each major contract before assuming the tax saving. Small private-sector clients are outside these rules, and genuinely independent freelancers with several clients are usually fine. When in doubt, get a contract review.
After You Register: Your First-Year Checklist
- Keep business money separate. Pay yourself through a mix of salary and dividends, and never run personal spending through the company account.
- File on time, every time. Annual accounts to Companies House, a confirmation statement once a year (£50 online), and a company tax return to HMRC. Missed deadlines bring fines, and they start quickly.
- Keep records for at least 6 years. Invoices, receipts, bank statements and contracts — accounting software makes this painless.
- Watch the VAT threshold. If your taxable turnover passes £90,000 in any 12-month period, you must register for VAT. You can also register voluntarily below that level to reclaim VAT on your costs.
- Tell HMRC when you start trading. The Corporation Tax clock starts then, even if the company sat dormant first.
Mistakes Freelancers Make When Going Limited
The most common one is publishing a home address on the public register without thinking it through — fix it with a service address before you file, not after. Next comes mixing personal and company money, which turns a simple set of accounts into a mess. Then there is forgetting the confirmation statement, because unlike a tax return it arrives quietly once a year. And finally, assuming limited status alone protects you: sign a personal guarantee carefully, and never ignore a tax deadline hoping it goes away.
Frequently Asked Questions
Can I be the only director and the only shareholder of my company?
Yes. A UK private limited company can have a single director who is also the sole shareholder and the sole person with significant control. This is the standard setup for solo freelancers, and there is no requirement to appoint a company secretary.
Do I need an accountant if I register a limited company?
Legally no, but practically most freelancers say yes. Company accounts, Corporation Tax and dividend paperwork are more complex than a sole trader return, and a good accountant usually saves more than they cost. At minimum, use proper accounting software from day one.
Can I register a limited company while I am still employed?
Yes, as long as your employment contract does not forbid it. Check for any non-compete or conflict-of-interest clause first, and remember you will need to tell HMRC about both incomes. Many freelancers start the company while employed and switch to full-time freelancing once clients are steady.
Does a limited company fully protect my home and savings?
Generally, yes for normal business debts — the company’s debts are its own, not yours. But the protection has limits: personal guarantees on loans or leases, and reckless trading, can still reach your personal assets. Treat limited liability as strong protection, not a magic shield.
Conclusion
Registering a limited company as a freelancer is a straightforward, £100 step that makes real sense once your profits are steady and growing. Get your identity verified, choose your name and addresses with privacy in mind, file online, and set up your Corporation Tax and business bank account straight away. Keep your records clean, and the company will work for you, not against you. For the official process, start at GOV.UK: Set up a private limited company.
