Do I need to register a company to sell services online?

[Scrooby]

Hello MCM,

I failed my Business exams at school a few years ago, so Imma ask the community.
Im wanting to sell services online, people commit to buy a services off of me, and then I let them have it for a month or so. (not web hosting, more of a ... lease service)

I was wondering If I had to register a company to do so, I dont really like the whole idea of owning a company to be honest, I live in the UK. So would I need to register one for legal reasons?

No trashy pls, and thanks in advance!

Kind Regards,
- C

 

[Ivain]

No, you do not need to own a company, but at some point it might be a good idea. I'm not 100% sure about the UK, but I assume it works similar to NL. You can work as a freelancer without registering a company, but it would mean that you'd need to pay income tax on ALL income above whatever tax-exempt income limit the UK has. This is less than ideal if you expect expenses. Say, you expect to pay for a full adobe suite at $60 per month (all adobe software). let's say you make $1200 per month on average, and this means you have to pay an average of $200 per month taxes (16% of the whole. Not accurate). You would then have to pay the $60 per month with the $1000 you have left, not counting living costs (which you may or may not have). leaving $940 per month

if you have a company, you'd get to subtract the $60 per month from the $1200 per month as a cost before income taxes. As a result, you have $1140 that you need to pay tax over. With 16% that would be $182, instead of $200.

of course, at this scale that would be insignificant. The extra work from administrating a company is not worth the $18 per month you save.

The downside of companies is that you have to keep track of ALL the finances related to it. every $ you make with it has to be noted down, almost to a stifling point.

 

[Rza1337]

If you want to PM me I can help explain things a bit more. Currently studying towards ACCA.