If you've been doing it for a year and taking payment during this time, then I'd suggest talking to an accountant as you'll have to account for this work on either your company accounts or on your tax return
A google search will find many company registration agents where you can easily and cheaply setup a Ltd company. You need to register with the Inland Revenue and possibly Customs & Excise (VAT)
A Ltd co is usually the best option to go as this makes your company a legal entity and removes your personal risk (unless you act improperly as a director).
You'd be best off seeking advise from an accountant of other suitably qualified business agent rather than on a public forum though.
Originally posted by digitalmischief ...but as there is no risk on my part to setup this company (only my time) is a ltd company neccesary?
I really really hope you don't believe that statement, I don't mean to be harsh, but it is one of the first things you'd learn on a business course and in the real world - There is no such thing as a risk free company, what if a client sues because the site you built lost them a major sale? No such thing as no risk, like there's no such thing as your target market being "everyone" etc.
First thing I'd do, is talk to your local business advice centre - You'll have one, every area does, they'll tell you everything you need to know about tax, accounts etc. etc.
VAT is nothing to do with profit, it is to do with turnover. Tax depends if you are running as a sole trader or a liimited company. This is why you need to go speak to your local business advice centre etc. or an accountant - They will give you the correct information, wheras you're going to end up having to work out whose advice is right/wrong on these forums.
Although obviously, you are still likely to need to talk to an accountant/business expert - especially about how to explain the fact you've been doing work for a year and not registered as self-employed (Inland Revenue say you must register within 3 months of the end of the month you started or pay a nice fine).