I was a sole trader in the UK for a few years as a freelancer, but what tipped the balance and made me use a limited company instead was mainly liability protection: client projects/related risks were getting big enough to warrant it, plus I wanted a separate legal entity for my own projects.

The additional paperwork isn't actually that bad if you have a decent accountant who is used to working electronically (I can recommend a v good one, FWIW).

<shameless> You might find this handy: https://leanpub.com/freelancedeveloperbook/ </shameless>