March 2026
Making Tax Digital 2026: Should Self-Employed Consider a Limited Company?
From April 2026, self-employed individuals earning over £50,000 will need to submit quarterly digital tax updates. Many professionals are now reviewing their business structure.
From April 2026, the way many self-employed individuals report their income to HMRC will change significantly under Making Tax Digital for Income Tax. If you earn more than £50,000 per year from self-employment or property, you’ll need to keep digital records and submit quarterly updates to HMRC.
- Four quarterly digital updates
- An End of Period Statement
- A Final Declaration
For many professionals, this is a natural moment to ask: is my current business structure still the most practical one?
If You Have Been Thinking About Moving to a Company
Many business owners start as self-employed because it’s the quickest way to begin working independently. But over time the situation often changes. You may now:
- Have regular clients and stable income
- Hire subcontractors or staff
- Work with larger organisations
- Want a more structured business setup
“The upcoming Making Tax Digital changes may simply be that moment.”
Many professionals have already considered forming a company but postponed the decision because there never seemed to be the right moment. The upcoming MTD changes have focused minds.
Self-Employed vs Limited Company
| Self-Employed | Limited Company |
|---|---|
| You and your business are the same legal person | The company is a separate legal entity |
| Personally liable for business debts | Personal assets are generally protected |
| All profit taxed as personal income | Profits taxed at Corporation Tax first |
| Taxed on all profit, whether withdrawn or not | You choose how much to take as income |
| Single Self Assessment return | Company accounts + CT600 return |
Key Benefits of Operating Through a Company
Your personal assets are generally protected from business liabilities. The company is a separate legal entity.
Take income as salary and dividends. You only pay personal tax on what you actually withdraw from the company.
Work with larger clients, sign commercial contracts, and hire staff more easily. Many organisations prefer trading with companies.
What You Need to Register
In most cases, we only need:
- Your chosen company name (we recommend 3 options)
- Details of director(s) and shareholder(s)
- A registered office address in the UK
Most companies are incorporated within 24–48 hours.