Hi,
I was once a sole trader. Now have a ltd company and also vat registered.
if you are going for the domestic market... I dont think it matters as much... I had no problem in hitting and getting domestic work.
However you will find that if you are a ltd company people will look at your more professionally, but may think you are more expensive. You will also have to file annual accounts at companies house. Yearly.
If you are going for commercial work then ltd is the way to go... but your turnover needs to be a certain amount if you want to go for large tenders. Never worked that out why that was important... just guess thats busness.
If and when you move to VAT registered your domestic customers will find you 17.5% more expensive as they cannot claim back the vat.
Domestic markets are hard to please the customers and I found it was not regular enough so went to commercial and never looked back.