UKC

I’m looking at starting doing some coaching as a small sideline on top of my full time job.

any advice on whether I should do this second income source as sole trader or set up ltd company?

cheers

It depends how much you expect to earn, small amounts, off the top of my head (I think its £3k but you're best checking) means you don't need to file a separate tax return and it can be deducted via your tax code. 

If it's larger then I'd probably just go sole trader unless you're planning on taking on a lot of debt via your business. Basically, if you can ever see yourself going under owing lots of money out they can come after your personal assets. If it's a limited company then they can't, but you have got the hassle of filing proper accounts and what not. 

Anything under £1k doesnt technically need to be reported as you've got an allowance for it.

Setting up as a Limited Company really only makes sense past a certain threshold as you'd most likely require an accountant to do your year end where as depending on your sole trader income you might be able to get away with doing it yourself. There are also other costs involved with being Ltd.

A big part of being a Limited company is that fact that you have limited liability, which Lord_ash2000 mentions above. For the most part people can only come after the company and to you directly (there are exceptions to this though).

Thanks both, doesn’t any amount of income get taxed in line with my current tax status?

https://www.gov.uk/check-if-you-need-tax-return is quite useful

You have an allowance of £1000 for hobby income... selling knitting, jam or in your case coaching.