🧠 Why Now’s the Best Time to Review Your Business Structure

As we head into the final months of 2025, many business owners are taking stock — looking at profits, growth, and plans for the new year. But there’s one area that often gets overlooked 👇

Is your business structure still the most tax-efficient and suitable for you? 💷

Whether you’re a sole trader, partnership, or limited company, the way your business is set up can make a big difference to how much tax you pay, how much admin you face, and how protected you are if things go wrong.

Here’s why now is the perfect time to review your structure — and what to consider before April 2026.

💼 1️⃣ Sole Trader vs Limited Company – What’s the Difference?

If you’re self-employed, you might be wondering whether incorporating your business is worth it.

Here’s a quick breakdown 👇

	Sole Trader	Limited Company
Legal status	You are the business	Separate legal entity
Tax	Pay Income Tax & Class 2/4 NI on profits	Pay Corporation Tax on profits, plus tax on dividends
Paperwork	Simple accounts, Self Assessment return	Full statutory accounts, CT600 return, and confirmation statement
Risk	Personally liable for debts	Limited liability protection
Perception	Seen as small/local business	Often seen as more established or professional

So, why does this matter now?
Because tax rates and thresholds are shifting in 2025/26, and the right setup today might not be the best one next year.

💷 2️⃣ When It’s Time to Incorporate

You might consider moving from sole trader to limited company if:
✅ Your profits are growing above £35,000–£40,000 per year
✅ You want to retain profits within the business
✅ You’re taking on bigger contracts or employees
✅ You want to protect personal assets

Operating as a company can reduce your overall tax bill — especially when balancing salary and dividends — but it also comes with more compliance and admin.

That’s where good planning (and a good accountant!) makes all the difference.

🧾 3️⃣ When It Might Be Better to Stay as You Are

For smaller or newer businesses, staying as a sole trader can make sense.
👉 Less paperwork
👉 Lower accountancy costs
👉 More flexibility as you grow

If your income is below £30,000 or fluctuates during the year, the simplicity of sole trading might still outweigh the benefits of incorporation — at least for now.

📊 4️⃣ Partnerships and LLPs

If you run a business with others, you could be trading as a partnership or a limited liability partnership (LLP).

An LLP offers more protection (similar to a company) while keeping the flexibility of a partnership — but each setup has different reporting and tax rules.

This is another reason why reviewing your structure annually is so important — things change quickly, and what worked before might not be optimal anymore.

🔍 5️⃣ Why November Is the Perfect Time to Review

Making a change at the right time of year can help:
📅 Align your new structure with your accounting year-end
💷 Maximise tax reliefs before 5 April 2026
🧮 Avoid overlap with your Self Assessment or VAT filings

A November review gives you a clear plan heading into the new year — so you can focus on growing, not guessing.

🤝 How We Can Help

At Llewellyns Chartered Certified Accountants, we help business owners across South Wales understand the real-world impact of their business structure — from tax efficiency to personal protection.

Whether you’re thinking of incorporating, forming an LLP, or reviewing your current setup, we’ll help you:
✅ Compare the tax position of each option
✅ Handle HMRC and Companies House registration
✅ Manage the transition smoothly and compliantly