Sole Trader vs Limited Company for OnlyFans: The UK Tax Secret That Could Save Creators Thousands

If you’re earning money on OnlyFans, one question becomes unavoidable as your income grows: Should you stay self-employed as a sole trader, or switch to a limited company?

For creators earning over £30,000 per year, this decision can dramatically affect how much tax you pay, how protected your finances are, and how seriously your business is treated.

This blog explains everything UK creators need to know — including tax rates, thresholds, and when switching makes financial sense. One key takeaway: your business structure matters.

When you earn money from OnlyFans, HM Revenue and Customs treats you as running a business. That means you must choose a structure:

• Sole trader (self-employed)

• Limited company

Each has different tax rules, benefits, and responsibilities. Choosing the right one could save you thousands per year. Choosing the wrong one could mean overpaying tax unnecessarily.

The Best Business Structure for OnlyFans Creators in the UK

Most creators start as sole traders because it’s simple and fast.

How it works:

• You register as self-employed with HMRC and report your income through a Self Assessment tax return.

• Your profit is taxed as personal income.

Pros of being a sole trader:

✅ Simple to set up

✅ Less paperwork

✅ Lower accounting costs

✅ Easy to manage

✅ Perfect for beginners

Cons of being a sole trader:

❌ Higher tax at higher income levels

❌ No separation between personal and business finances

❌ Less tax planning flexibility

❌ No limited liability protection

Option 1: Sole Trader (The Default for Most OnlyFans Creators)

A limited company is a separate legal entity from you personally. This structure often reduces tax for higher earners. The company earns the income, and you pay yourself through:

• Salary

• Dividends

How it works:

The company pays: 19%–25% Corporation Tax on profits

You then pay personal tax on:

• Salary (via PAYE)

• Dividends (lower tax rates than income tax)

Pros of Limited Company for OnlyFans Creators:

✅ Lower tax at higher income levels

✅ Greater tax planning flexibility

✅ Limited liability protection

✅ More professional business image

✅ Easier to scale your business

Cons of Limited Company:

❌ More paperwork

❌ Annual accounts required

❌ Corporation tax returns

❌ Prone to higher accounting costs

❌ More complex administration

Option 2: Limited Company (More Tax Efficient for Higher Earners)

For most creators:

• Under £30,000/year → Sole trader is usually best

• £30,000–£50,000/year → Depends on situation

• £50,000+/year → Limited company often more tax efficient

The higher your income, the more beneficial a limited company becomes.

Choosing the right structure could save you thousands in tax every year.

Many OnlyFans creators unknowingly overpay tax simply because they use the wrong structure.

Getting professional advice ensures you stay compliant and tax efficient. OnlyTax provide free consultations where we can offer you bespoke advice for your situation. Contact us today.

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Final Considerations