Film-makers often set up a separate limited liability company for each project because if it is a financial disaster, or gets sued, or whatever, it greatly restricts the damage that might be done to their other properties. In the UK, setting up a Ltd company is cheap - last time I did it, it cost less than £100. And there can be real tax advantages. For years, my wife & I, as the only shareholders and directors, were paid salaries that came in under the threshold for paying tax & NI. Then we paid ourselves quarterly dividends, which are taxable but very tax-efficient for us because we're in France.
BUT, the accounting fees can be quite high. You need to keep very strict & detailed accounts (or pay a bookkeeper to do this), and you'll need a decent accountant to handle the annual returns. Our annual accountancy fee was around £1,500, for a company with very modest turnover. I did the bookkeeping myself, but it was a PITA.
If the Inland Revenue gets any idea that you might not be doing things quite right, you stand to get audited, and that can be expensive in terms of accountant's fees. (Some people I know take out insurance against this.)
