The self-employed lifestyle is often perceived as the Holy Grail of careers – No office politics, dress code or having to spend time commuting 5 days a week. Every day is a day off when you’re self employed, right? As any self-employed person will tell you, 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 that ultimately isn’t suited to everyone – so, how do you know if it’s the right choice for you?
The pros of being self employed
Freedom – if you’re the kind of person who functions optimally under your own steam you will thrive as self-employed. Days can be scheduled to suit your workload and what you want to do. If you’d prefer to do yoga all morning and then work from midday – 11pm then you can.
Earnings – when you’re starting out as self-employed you might find you have to compromise on what you charge to establish a client base. However, as your portfolio of work grows you can increase your rates. Day rates for the self-employed can be pretty impressive and there’s no employer to take a cut so everything comes to you.
Taxes – once you’re self-employed you can set many business expenses off against tax to reduce your overall tax bill. That means everything from your spare room to your laptop become tax deductible if you’re using them for your work.
No commuting – the daily commute can really ruin people’s lives; both due to potential costs involved and the negative effects on a work-life balance. If you’re freelance then your commute is from the bedroom to your desk, perhaps via the coffee machine.
The cons of being self employed
No working hours – although you can set your own working hours, many self-employed people rarely do. The result is that, once you start down the self-employed road, you might well find yourself working all the time. Weekends become work days, evenings are no longer sacrosanct and your day could start as soon as you open your eyes. No set working hours might seem great to the outsider, but the reality can in fact be very different.
No pensions or benefits – you become entirely responsible for yourself once you’re self-employed. That means there is no employer to contribute to a pension scheme and no one is going to offer you benefits such as childcare vouchers or health club membership. Plus you’ll have no sick pay so if you can’t work then the work doesn’t get done and you don’t get paid.
Taxes – if you become self-employed you’re responsible for filling out a self-assessment tax return, for filing it on time and making multiple payments throughout the year, including some ‘on account’ for the following year. Working through the system can be a nightmare and so many self-employed opt for an accountant to help them do it.
You’re on your own – everything from acquiring clients to marketing your business, handling conflicts and defining workflow becomes your responsibility and no one else’s. If that’s not something you relish or feel you can really full responsibility of, then being self-employed can be incredibly stressful.
Deciding on if you should go it alone? Talk to the experts at Appleby Mall!