Accountants for Interior Designer: Should You Go Limited or Sole Trader?
For every interior designer in the UK, selecting the appropriate business structure is an essential choice. Whether you’re just launching your creative studio or scaling a growing client list, one central question pops up early: should you operate as a sole trader or form a limited company? This decision impacts everything from your tax bill to how professional your brand appears to clients. And when you’re already juggling design briefs, suppliers, and client demands, it helps to get straight answers from professionals who specialise in supporting your kind of business—accountants for interior designers.
Let’s unpack the pros, cons, and tax implications of both options, and explore how you can make the right financial choice for your design career.
Sole Trader – Simplicity, But At A Cost
Many interior designers begin their journey as sole traders. It’s the simplest way to get started: register with HMRC, keep accurate records, and file your Self Assessment tax return each year.
You’re in complete control. There’s less paperwork, and you can use your personal bank account for business (though separating finances is always smart). However, the biggest drawback lies in liability—legally, you and your business are the same. If anything is going wrong financially or legally, your belongings might be at risk.
Tax-wise, sole traders are taxed on all profits above the personal allowance (£12,570 as of 2025) at standard income tax rates. You’ll also pay Class 2 and Class 4 National Insurance, which can add up quickly once your business starts growing. That’s why many designers eventually hit a ceiling and begin wondering if it’s time to switch to a limited company.
Limited Company – More Tax Efficient, But More Complex
If your interior design business is gaining traction, going limited could offer serious advantages. Your business becomes a distinct legal entity when you use a limited corporation. This means limited liability for you as the owner—your finances are protected if something goes wrong.
From a tax perspective, this is where it gets even more attractive. As a director, you can pay yourself a combination of salary and dividends, which is often more tax-efficient than paying full income tax on profits as a sole trader. Corporation tax is currently lower than income tax, and dividend allowances give you more flexibility with how you take earnings out of the business.
However, it’s not all sunshine and savings. Running a limited company comes with extra responsibilities: submitting annual accounts to Companies House, maintaining a payroll if you’re paying yourself a salary, and keeping your bookkeeping airtight. This is where having accountants for interior designer professionals on your side becomes essential—they’ll handle the admin and help you optimise your finances. At the same time, you focus on bringing creative spaces to life.
The Real-World Cost Difference
Let’s say you earn £50,000 a year from your design business. As a sole trader, your income tax and National Insurance could reduce your take-home pay significantly, often leaving you with less than if you were operating through a limited company.
You may frequently model the savings with the aid of a competent accountant. Once you cross the £30,000–£40,000 earnings threshold, the tax benefits of going limited start to outweigh the convenience of being a sole trader. Plus, being a limited company often increases your credibility when pitching to high-end clients or commercial property developers.
Professional Image and Growth Potential
While tax efficiency is a significant factor, don’t overlook branding and professionalism. Clients often feel more confident working with a limited company, especially if they’re corporate, hospitality, or property-based clients. A limited company name also feels more official—ideal when your interior design studio starts becoming a recognised brand.
Additionally, should you wish to grow, hire staff, or even seek funding, operating as a limited company is usually a requirement.
Still Not Sure? Let Accountants for Interior Designers Guide You
Making the switch from sole proprietorship to limited corporation doesn’t have to be difficult. That’s where JungleTax comes in. As expert accountants for interior designers, we work with creatives across the UK to set up their businesses correctly, avoid unnecessary taxes, and stay compliant with changing HMRC rules.
We’ve helped new and established designers make that switch at the right time. From registering with Companies House to optimising your tax strategy and providing tools to manage expenses, our team ensures you never feel lost in the paperwork.
If you’re not quite ready to incorporate but want to keep your options open, we can still help you set up systems that scale easily—so the transition is smooth when the time comes.
Don’t Let Taxes Hold Back Your Creative Career
Your skill merits a business framework that fosters expansion, whether you’re designing opulent kitchens or managing daring commercial restorations. Choosing between sole trader and limited company isn’t just a financial choice—it’s about control, protection, and how seriously clients take you.
Let JungleTax show you the best path forward. With specialist advice from accountants for an interior designer, your business will be structured to thrive creatively and financially.
Just a call or click away – Let’s Connect
hello@jungletax.co.uk
0333 880 7974
FAQ – Accountants for Interior Designers
Is it worth limiting your world as a freelance interior designer?
Yes, especially if your profits are growing. You’ll gain tax advantages, limited liability, and a more professional image.
Can I switch from sole trader to limited company later?
Absolutely. Many interior designers start as sole traders and make the switch as they grow. An accountant can help you manage the transition smoothly.
How much tax will I pay as a sole trader vs a limited company?
It varies based on your earnings. Generally, limited companies offer more tax efficiency after £30k–£40k in profits.
What are the extra costs of running a limited company?
You’ll need to file annual accounts, possibly run payroll, and maintain stricter bookkeeping. But with the right accountant, it’s very manageable.