Becoming Self Employed
Posted: Sunday March 8 2020
By: Banner Jones
Spring has officially arrived (not that you can tell from the amount of snow we have had recently!) Spring marks the start of new beginnings and for some people this involves embracing their dreams of becoming self-employed or a starting a completely new choice of career. Whether you are starting out on your own or changing employer it is important to make sure you are aware of your rights and obligations.
You are responsible for generating your own income and can retain what you earn (once you have paid any costs and expenses).
You only pay income tax after you have earned more than your personal allowance and business expenses are deducted (specialist tax advice should be sought regarding income tax and tax deductible expenses).
You control your own hours and working pattern and are only answerable to yourself.
You decide where you work and who you work with.
The business is led by your vision, dreams and ideas.
No guaranteed regular income and pension contributions.
Being a sole trader means the law does not distinguish between you and your business and you will be liable for the business’ debts. However, this can be avoided by setting up your business as a limited company or a limited liability partnership. You should seek specialist advice on the best way of trading for you.
You lose your entitlement to statutory benefits like holiday pay and sick pay. If you are not able to work the business will stop.
There will be peaks and troughs in your income and you need to prepare for this.
The responsibility for paying your income tax and National Insurance contributions falls to you, but you can outsource this to an accountant.