OnlyFans Sole Trader vs Ltd Company: Which Should You Pick?

Staying a sole trader is simpler and keeps your finances private. A limited company can lower your tax bill once your profits are high and steady, but it brings more admin and puts your name on a public register. Neither is automatically better.

It’s one of the most common questions UK creators ask once the money starts coming in. The right choice depends on your income, how much admin you’re willing to take on and how much your privacy matters to you.

This article is for general information only and isn’t financial advice. Speak to a qualified accountant before you make any decisions about your business structure.

What is a sole trader?

Being a sole trader is the simplest way to be self-employed in the UK. You register with HMRC, file a Self Assessment tax return each year, and pay Income Tax and National Insurance on your profits.

There’s no legal separation between you and your business. You own everything, you’re responsible for everything, and all the profit is yours.

Most creators start here, and plenty never change. It’s quick to set up and cheap to run, and there’s very little paperwork.

What is a limited company?

A limited company (Ltd) is a separate legal entity. You register it with Companies House, and in the eyes of the law the company becomes its own “person”. You’re a director of the company, and usually its only shareholder as well.

The company earns the income and pays Corporation Tax on its profits. You then take money out as a mix of salary and dividends. Those two steps are where any tax saving comes from, and they’re also where the extra complexity comes from.

How they compare on tax

For most people, tax is what decides it.

Sole trader tax

As a sole trader, you pay:

• Income Tax on your profits (after allowable expenses). The rates for 2025/26 are 20% basic rate (£12,571 to £50,270), 40% higher rate (£50,271 to £125,140) and 45% additional rate (above £125,140).
• Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% above £50,270.
• Class 2 National Insurance, which is no longer compulsory. Profits at or above the small profits threshold get a free credit, and below it you can pay voluntarily.

Put together, that’s roughly 26% on profits in the basic rate band, rising to 42% once you’re in the higher rate band.

Ltd company tax

With a Ltd company, the tax works differently:

• The company pays Corporation Tax on its profits. The rate is 19% on profits up to £50,000 and 25% on profits above £250,000. In between, marginal relief applies, which works out at 26.5% on the slice of profit in that band.
• You pay yourself a salary, which the company can deduct as an expense. A lot of directors set it at or near the Personal Allowance (£12,570), so there’s no Income Tax on it and the NI stays low.
• You take the rest as dividends, which are taxed at lower rates than wages. From 6 April 2026 the rates are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate). The first £500 of dividends each year is covered by the dividend allowance.

At higher incomes, that can add up to a lower overall tax bill through a Ltd company. The gap is smaller than some people suggest, though. The rise in dividend tax rates in April 2026 narrowed it, and the extra cost of running a company narrows it again.

Use our tax calculator to model both routes with your own numbers.

Pros and cons of staying sole trader

Advantages:

• Simple to set up. You register online with HMRC, and the form doesn’t take long.
• Very little ongoing admin. You file one Self Assessment tax return a year.
• Low running costs. There are no Companies House fees, you don’t legally need a separate business bank account (though it’s a very good idea), and accountancy fees are lower.
• Your financial information stays private. Sole trader accounts aren’t published anywhere.

Disadvantages:

• Higher tax at higher incomes than the Ltd route.
• Unlimited personal liability, so in theory your personal assets are at risk if the business runs up debts.
• It can look less “established” to some business partners, though that rarely matters for creators.

Pros and cons of going Ltd

Advantages:

• Possible tax savings at higher profits through salary plus dividends.
• Limited liability. The company’s debts are kept separate from your personal assets (in most circumstances).
• It can look more professional in some business dealings.
• More flexibility over how and when you take income from the business.

Disadvantages:

• More admin. You have to file annual accounts and a confirmation statement with Companies House, send in a Corporation Tax return and run payroll for your salary.
• Higher running costs. As a rough guide, accountancy fees for a Ltd company are often £1,000 to £2,500 a year, compared with £200 to £500 for a sole trader’s Self Assessment.
• Public record. Anyone can look up your company name, registered office address and filed accounts on the Companies House website. If staying anonymous matters to you, that’s a big consideration. A registered office service keeps your home address off the register, but your name as director will still be public.
• You can’t just take money out whenever you like. There are rules on how and when you can pay dividends, and getting them wrong can cause legal and tax problems.

The privacy question

Privacy gets its own section because it matters more to creators than to most business owners.

When you register a Ltd company, some information becomes public:

• Your name (as director)
• The registered office address
• Your date of birth (month and year, not the full date)
• The company’s annual accounts (small companies can file less detail, but what they file is still visible)

If you want your real name kept completely apart from your creator work, a Ltd company leaves a paper trail that being a sole trader doesn’t. You can reduce it by choosing a company name with no link to your creator name, using a registered office address and filing only what you’re required to. You can’t make it invisible, though.

Talk to your accountant about this before you incorporate. They can show you exactly what will be public.

When does switching make sense?

There’s no single income figure where a Ltd company automatically becomes the better choice. The crossover depends on your expenses, whether you have other income, the rest of your tax situation and how much the extra admin is worth to you.

As a very rough guide, many accountants will say the conversation is worth having once your profits are steadily above a certain level. Where they put that level varies, which is why advice for your own situation matters.

Signs that incorporating might suit you:

• Your profits have grown steadily over several months.
• You’re paying higher rate Income Tax as a sole trader.
• You’d like to leave some profit in the company instead of taking it all out.
• You’re fine with the extra paperwork, or happy to pay an accountant to handle it.

Signs that staying a sole trader might suit you:

• Your income goes up and down, or you’re still growing.
• You want to keep things as simple as possible.
• Privacy is a high priority and you don’t want a Companies House listing.
• The tax saving would be small once you’ve paid the extra accountancy costs.

You do not have to decide right now

Starting as a sole trader doesn’t lock you in. You can incorporate later if the numbers change. You might run as a sole trader for years before you switch, or never switch at all.

Learn your options, get advice from an accountant when the time comes, and choose what suits your own numbers instead of what worked for someone else.

If you want to see how different income levels change your tax under each structure, try our tax calculator. And if you’d like a team to run chat, posting and promotion while you focus on creating, take a look at how we work. The team works in your account through Infloww, a creator CRM, with no access to your bank details, payout information, email or social media accounts. The account stays in your name, payouts go to your own bank, and you keep full control and can end our access at any time by changing your password. We invoice for the agreed split after you’re paid, and it’s month to month with no lock-in and no exit fees, on 14 days’ notice.

This article is for general information only and isn’t financial advice. Tax rules and rates can change. Speak to a qualified accountant about your own circumstances.