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self employment guide

Many of us who are considering changing jobs are faced with a common conundrum, "Should I stick with a basic or could I do this self-employed?". Of course there are many benefits to having a consistent monthly wage; you know your mortgage will always be covered and you know exactly where you stand with your finances. For some of us, having that safety net of a basic wage is vital. However, could you be doing the same job you're doing but earning so much more on a self-employed basis?

Of course there are many things to consider; if you haven't been self-employed before you need to think about taxes and ensuring you have a steady flow of work. However, being self-employed can mean that you can be working in a similar role to your current job and earn so much more.

What many people don't realise is that an employer must incur a lot of costs when hiring someone. They need a finance and HR department and must pay costs of admin associated with paying you on a PAYE basis each month. These costs are all taken into account when calculating what your wage should be before you take on a role. Without these costs, you could be benefitting greatly from a financial point of view if you switch to self-employed.

You must register as self employed with HMRC within 3 months of commencing work. If you are going to be an employer you will have to advise HMRC of that as well to be set up as an employer; VAT registration may be necessary. An accountant can advise on such matters as raising finance, together with the preparation of annual accounts and the completion of annual Tax Returns. He will advise on tax liabilities and prepare projected accounts for business plans and general financial planning. He can also deal with Book-keeping and Payroll (if appropriate). There is no Government help available if self-employment does not work out - it will simply be a case of ceasing and resuming employment. There will be no sick pay, holiday pay or any other employee benefits and so it is important to think about insurance to cover this. You will have to budget carefully to cover months when no money may be coming in. If you are determined to succeed, know your subject and your market, be confident and disciplined enough to manage all aspects of what is required and reap the benefits - the rewards are there!

For more detailed, up to date information please visit the government website 
https://www.gov.uk/working-for-yourself