Private limited companies make up about 37% of the total UK business population of 5.6m. More than half (56%) are sole trader businesses (ie self-employed people), while ordinary partnerships make up the remaining 7%. About 950,000 limited companies in the UK have no employees other than the sole director running the business (ie they are one-person-band companies).
Sole traders and members of ordinary partnerships pay themselves by withdrawing cash from their business. These amounts are called “drawings” and if they exceed the Personal Allowance (£12,570 in 2022/23), they’re subject to Income Tax and National Insurance contributions (NICs), which is calculated after the sole trader files a Self Assessment tax return each year.