As a self-employed individual or a partner in a firm are entitled to the profits of the business and their income must be declared on a self-assessment return.
A company is a separate legal entity which employs its directors, who are responsible for managing it, and can pay dividends to the shareholders who own the company. A dividend is a share of the company profits. Because the company is separate from its owners and manager it must declare its income, before any dividends, to HMRC on a corporation tax return. Each individual shareholder and director are required to complete a self-assessment return to declare the income received from the company.