At a relatively early stage in your freelancing journey, you'll need to let HMRC know that you're self-employed, so you can start completing the relevant paperwork.
Whilst most freelancers choose registering as a sole-trader, you are also able to start your business by incorporating as a limited company.
Registering a limited company technically means you're still employed for tax purposes, even though you may be the only employee and owner of the company.
Registering a limited company comes with additional administrative requirements, and you'll be also paying different forms of tax. There are some benefits, including more control over how you pay yourself (i.e. using a combination of salary and taking dividends from your profits), and reduced financial liability and risk should something go wrong.
Many customers avoid working individuals who work through their own limited companies (often known as a Personal Service Company or PSC), as it can create issues around something called IR35 - it's worth understanding how your sector operates before deciding whether a limited company is right for you.
It can be confusing and unclear as to why you'd choose sole-trader or registering a limited company, so understanding the differences is important.
