Sole Trader vs Limited Company — Business Structure
Switching from sole trader to limited company — the tax side
Spoke 5 — incorporation relief, VAT, timing, and the wind-down options.
Incorporating is a tax event, not just a registration: 1. **Transferring the business in** — incorporation relief defers CGT on goodwill transfer if conditions met 2. **Tax world changes** — company pays CT; you take salary + dividends 3. **Time it well** — clean date (year-end) avoids two sets of figures 4. **VAT** — £90k threshold applies either way; registration moves to new entity 5. **It's not always one-way** — informal strike-off (<£25k retained) or MVL with BADR if winding back down For the **formation mechanics** (Companies House, ID verification, £50 incorporation), see Verity (sister Rajoka brand). RR handles the tax planning around it. **Read the full guide at [rraccountants.uk/switching-sole-trader-to-limited-company](https://rraccountants.uk/switching-sole-trader-to-limited-company).**
Resources
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