| Tax | Sole traders/partnerships | Companies |
| Income tax | Yes | No |
| Corporation tax | No | Yes |
| National Insurance | ||
| Class 1 (employees) | No | No |
| Class 1 (employers) | Yes | Yes |
| Class 2 | Yes | No |
| Class 3 | Yes | No |
| Class 4 | Yes | No |
| VAT | Yes | Yes |
| Rates | Yes | Yes |
| Council tax | Yes | Yes |
All employers regardless of whether they are sole traders, partnerships or companies pay class 1 national insurance, however a sole trader does not pay class 1 national insurance on his own earnings.
Rates and council tax will be due if you operate out of a business premises. I f you operate out of a room in your house which you do not use exclusively for business then you should not be liable to extra local government taxes.