Am I ready?
Mon Jan 17 2022
Am I ready to become self-employed?
4.3 million people are self-employed in the UK. Sheffield and Exeter Universities conducted research into those who were self employed and those who were employed, the conclusion of the study was that self employed people are happier.
The findings were that the freedom and control of being your own boss boosted happiness and overall work satisfaction. Many of us may be flirting with the idea of running our own business and being our own boss, but are we actually ready to leave behind the security of employment?
There are many services that can help you come up with a plan when starting out as self-employed. Here in the east of England MENTA can help you decide if it is for you. MENTA courses can help you plan for the change.
When considering if you are ready to go self employed you will undoubtedly have many questions. People often ask about tax. When you are employed your employer’s HR department takes care of your pay, tax and national insurance. When you become self-employed you will need to register with HMRC as soon as you start your business. You will need to fill out and file your own tax return each year. It is done online and must be submitted by the 31st January. It can be a complex process and if you are not confident in doing it yourself, it may be worth paying a local accountant to do it for you. You will be required to submit all your income from April to April of the year prior to the tax return submission. You will also be required to record any taxable expenses that you have incurred whilst carrying out your work. As part of the tax return you will also be required to pay national insurance contributions.
Depending on the type of work you do, you may be considering work space and start up costs. For many of us part of the appeal of being self employed or a sole trader is working from home. However if your home is not suitable then you may need to take into consideration workshop or office costs.
If you do rent a commercial space you may have to pay business rates which is the equivalent of residential council tax. There are also lots of desk spaces you can hire by the day or month if you need to. If you will be meeting clients then you may need to consider suitable spaces to do this.
Start up costs to think about may include IT equipment or tools and a vehicle to do your job. You may also need to consider insurances such as professional indemnity and public liability. Professional indemnity insurance protects you if a client accuses you of negligence. Public liability covers you if a customer or member of the public suffers a loss or is injured as a result of your work. It may not be necessary if you don’t come into contact with customers or the public. Remember that MENTA has courses which specifically target these questions and help you to come up with a plan before you take the plunge.