A self-employed sole trader will work for themselves, although they may also have people working for them. They will pay Income Tax on their taxable profits through Self Assessment. They may also need to pay National Insurance. If they employ people, they will usually have to operate PAYE (Pay As You Earn) on their employees earnings and send an Employer Annual Return to HM Revenue & Customs (HMRC) online.
A business partnership is where two or more people set up a business together. Each partner is personally responsible for all the business debts, even if the debt was caused by another partner. Each partner is responsible for paying tax on their own share of the taxable profits and needs to show their share on their Self Assessment tax return. Each partner may also need to pay National Insurance. If the partnership employs people, it will usually have to operate PAYE on their earnings and send an Employers Annual Return to HMRC online.
A limited company is one of the ways that a business can be structured. In contrast to other types of businesses (for example sole traders or partnerships) or unincorporated associations (for example, members' clubs), a limited company is a legal entity distinct from its shareholders (or members) and directors.
A limited company comes into existence when it is registered at Companies House. Limited companies must also file certain documents with Companies House - when they are first set up and on an ongoing (normally annual) basis.
These Companies House filing requirements are separate to what the company needs to do for HMRC Corporation Tax purposes.
Clubs and societies refer to unincorporated members' clubs such as a sports or social club. Sometimes HMRC uses 'clubs' to also refer to societies, voluntary associations and other unincorporated bodies.
This service currently supports clubs and societies registering for VAT.
Charities and other organisations that may be liable for Corporation Tax, for example, some members' clubs, friendly societies, housing associations should use this service if they have registered with Companies House, or complete form CT41G (clubs) to tell HMRC that they are liable for Corporation Tax.