What kind of business set-up? 4; limited company

Last but not least... comes a limited company.

A private limited company (one where the shares can't be freely sold to members of the public) has Ltd after its name. A public limited company (where the shares are available for sale to anyone who cares to buy them) is a plc.

There doesn't have to be more than one person involved in a Ltd. That one person would be a director of the company and would probably also own all the issued shares.

Ltds are set up at Companies House, and I can help you to do that.

Like an LLP, a Ltd must file accounts in a set format every year at Companies House, which go on the public record. The addresses of the company and the directors also go on the public record.

A Ltd must also register with HM Revenue and do its own tax return every year. Again, that's all part of what I can do for you.

If the director wants to pay him- or her-self a salary, the director will be an employee of the company, so the company must register as an employer with HM Revenue and jump through all the hoops of running a payroll. And all company directors must do a tax return every year. I can help you do your tax return and I can recommend a good bureau that can help you with your payroll.

Also like an LLP, a Ltd has a legal identity all of its own. It's separate from the directors and shareholders. Ask M Ltd, the video-making business, is not the same legal entity as Emily Coltman, even though I'm the only director, only shareholder, and only person involved in the company.

The good side of that is that if Ask M Ltd is sued, the suer can't take my home away, unless I've done something really bad. My liability is limited to what I spent buying shares in the company.

If I do something really bad, I could be disqualified from being a company director ever again and at worst I could go to prison. So I'm trying very hard not to do anything bad :-)

But what I have to remember is that any money Ask M Ltd earns when I make videos, belongs to Ask M Ltd, not to me.

Ask M Ltd can pay me a salary as a director. It can pay me dividends as a shareholder. And it can pay me back any money it owes me, for example when I spend my own money on a new printer for the company.

But it cannot pay me any money any other way.

If I take out of the company more than I've put in, then that's treated as the company lending me money, and the company will pay extra tax on the loan. Bad idea.

While we're on the subject of tax, a company (Ltd or plc) is the only set-up I've mentioned so far that pays tax in its own right. For a sole trade, a partnership or an LLP, the trader / partners will pay income tax and National Insurance on their share of the profit from the business (which of course is 100% for a sole trader).

But a company pays corporation tax on its profits and does not pay National Insurance except on its staff's wages.

So, in return for all the palaver that goes with running a Ltd, you will save money in tax, and have a certain amount of extra kudos from putting "Ltd" on your letterheads and being the director of a company.

It's for you to decide whether it's all worth it!