create the letter head as an image the same width as a4 and open as a image in word

i wouldn't recommend this as a permanent solution

get a quote form your local printer on letterheads and print your letter heads seperately

clients will be able to tell the difference

i read somewhere that you have to be making over 60k in turnover to worry about it.

maybe ask someone at business link.

i think you only pay tax on profit too.

depends if you want to go freelancing fulltime?

i host images i have designed through an agency

they must just be worried if the client sees it they will probably go straight to you and cut out the middle man.

if you made no agreement definitely keep it online.

they are just trying to bully you!