Limited Company vs Sole Trader for Aesthetic Clinics – What’s Better in 2025?

Choosing between registering as a Sole Trader or a Limited Company is one of the first big decisions you will make when launching your aesthetic clinic and if you are already running your business, it is a decision worth reviewing in 2025 because the tax landscape, insurance, and even client trust are all evolving.

So, which is better?

Let’s break it down clearly, without jargon.

1. What’s the Difference?

Sole Trader
You run the business as you. You are personally responsible for any profits, losses, or debts. It is simple and cheap to set up.

Limited Company
Your clinic becomes its own legal entity. You are a director, and the company’s finances are separate from your personal ones. More paperwork, but more protection.

2. Which Is Better for Tax?

Sole Trader

• You pay Income Tax on all profits above your tax-free allowance.

• National Insurance is also payable once you cross £12,570.

Limited Company

• You pay Corporation Tax on profits (currently 19% to 25%).

• You can pay yourself via a mix of salary and dividends ; often more tax-efficient.

• There is potential to save on tax, but only if your profits are high enough.

2025 Verdict:

If your profits are over £35k–£40k/year, it is often worth exploring a Limited Company but always get professional advice first.

3. What About Admin & Costs?

Sole Trader

• Easier to set up and run.

• Fewer legal requirements.

• Cheaper accountancy fees.

Limited Company

• More admin (annual accounts, corporation tax returns, confirmation statements).

• Higher accountancy fees.

• But also gives a more polished impression.

2025 Verdict:
Sole trader is low-maintenance and good for startups but as your clinic grows, investing in proper structure pays off.

4. What About Legal Protection?

Sole Trader

• You are the business which means if anything goes wrong (client dispute, legal action), your personal assets are at risk.

Limited Company

• Offers limited liability. Your personal assets are protected if the business is sued or in debt.

2025 Verdict:
In the aesthetics industry, where insurance and risk are key concerns, limited liability is often worth the extra admin.

5. What Do Clients Trust More?

More and more clients are doing their homework before booking, especially with treatments like fillers, Botox, or skin rejuvenation.

A Limited Company name adds a layer of trust and credibility. It tells the client:

"This is a real business, not just a side hustle."

2025 Verdict:
If you’re serious about growing your clinic, being a Limited Company signals professionalism.

Summary: What is Better for You?

Final Thoughts

There’s no one-size-fits-all answer. But here is a simple guide:

Stay Sole Trader if:

• You’re just starting out.

• You’re testing the waters.

• You want to keep things simple for now.

Go Limited Company if:

• Your profits are rising.

• You want to scale or hire staff.

• You want to protect your personal finances.

• You want your brand to appear more professional and trustworthy.

Need Help Deciding?

At Aesthetic Accounts, we have helped dozens of clinic owners set up and structure their businesses the right way from day one or years down the line.

Whether you are new or thinking of switching from Sole Trader to Limited Company, we can guide you through it including the tax, compliance, and client impact.

Get in touch now to Discuss.