The self-employed lifestyle is often perceived as the Holy Grail of careers. No commute, no dress code and no nine-to-five. It can seem like every day is a day off when you’re self employed.
The reality of being your own boss is very different to what you might see on Instagram. It can be a tough and demanding lifestyle and doesn’t suit everyone. So, how do you know if it’s the right choice for you?
Advantages of being self employed
Self-employed workers have more freedom
If you can motivate yourself to do the work, then self-employment is ideal. Days can be scheduled to suit your workload and any other commitments.
Self-employment can increase your earnings
When you’re starting out as self-employed, you might have to compromise on what you charge to establish a client base. As your portfolio of work grows, you can increase your rates. Self-employment can be lucrative – especially with no employer to take a cut.
Self-employed workers can save on tax
Self-employed workers can claim expenses, which will reduce your overall tax bill. Everything from your spare room to your laptop can be tax deductible, if they’re used for business purposes.
Self-employed workers commute less
How often do you sit in traffic on the way to work? In 2017, a study found that every extra minute of commuting reduces your job satisfaction. If you’re self-employed, then your commute can be from your bed to your desk. You’ll be happier and you’ll save money spent on getting to the office.
Disadvantages of being self employed
Self-employment can mean no fixed working hours
Although you can set your own working hours, many self-employed people rarely do. You might well find yourself working all the time, including evenings and weekends. No set working hours might seem great to the outsider, but the reality can in fact be very different.
Self-employed workers cover their own pensions and sick pay
You become entirely responsible for yourself once you’re self-employed. You’ll need to choose your own pension scheme and make your own contributions to it. You’ll have no employee benefits or sick pay. If you do get ill, then you won’t be able to earn money.
Self-employed workers have to file tax returns
You’ll need to complete a self-assessment tax return and file it with HMRC. You’ll also need to make multiple tax payments throughout the year, including some on account for the following year. If you’re not familiar with the tax system, then many self-employed workers use an accountant.
Self-employment means more responsibility
Acquiring clients, managing cash flow, and marketing your business will all become your full responsibility. If you don’t relish this challenge, then this can be a big source of stress.
How Appleby Mall can help
We’ve been working with self-employed people since we opened our doors in 1998. We’ll work closely with you and your business. Our accounting service is affordable, fast and reliable.