Although you might be getting carried away with dreams of becoming your own boss, becoming self employed requires an unbelievable amount of hard work and dedication. Instead of simply using it as an escape route from a job you can’t stand, self-employment should only be considered by those with a determination to succeed and a belief in their own abilities.
However, please do not be put off being self employed as more and more people are doing it and being successful, apparently 15% of all UK workers are now classed as self-employed. In fact, the UK is currently home to over 5 million self-employed workers, with figures continuing to rise as people finally remove the shackles of 9-to-5 working.
But why exactly has self-employment become so popular?
BETTER WORK/LIFE BALANCE
Traditional workplaces can be incredibly restrictive when it comes to schedules and working hours, with the monotony of a 5-day week causing many to start exploring the possibilities of becoming self employed. More importantly, such rigid working schedules ultimately lead to a poor work-life balance, making it incredibly difficult for employees to work around their personal lives and other obligations.
When working for yourself, however, you’ll have complete control over your time schedule and workload, allowing you to work at a time and place that best suits you. Instead of worrying about the rush hour traffic or running out of holidays, the flexibility of self-employment allows you to set your own timetable and calendar; helping you achieve a much stronger work-life balance.
FLEXIBLE & REMOTE WORKING
Of course, when you’re self-employed, you can work in whichever environment best suits you. You can rent an office, share a workspace or even venture out to coffee shops. However, without question, one of the biggest appeals of self-employment is the opportunity to work from home.
Not only does remote working allow you to completely avoid the rush hour traffic and adverse British weather conditions, it can also help you save money on travel costs and make you much more productive. By avoiding unnecessary distractions and setting up a workspace which is completely tailored to your requirements, working from home can keep you more focused and ultimately improve results. A dedicated work space will help create a frame of mind to succeed, it will prevent you nipping off to put the washing on or pop to the shops. To succeed you really need to have the mind set that you are working traditional hours but in the knowledge that if you do need to pop out you can make up the hours later. It also mean that you can work the hours that work best for you, if you are not a morning person you could start work at a later than normal time but work later into the evening, equally you can get up bright and early and take the afternoon off. No boss, no-one to answer to. If the children are ill you don’t have to race around finding someone to care for them and then feel guilty all day, you can stay back and make the work fit around your life. You also don’t have a daily commute so you have already gained working/chargeable hours which over a week can add up.
TAX DEDUCTIONS
Although self-employed workers pay tax at the same rate as regular employees, they’re only taxed on their profits, rather than their overall income. Since you’ll be working for yourself, you’ll be able to reduce those profits by claiming back your business expenses, which usually includes your travel costs and allowances; thereby reducing the amount you can be taxed on.
However, there’s obviously strict legislation in place to prevent people from claiming tax relief illegitimately, and you can only make a claim on items used for business purposes. For example, you can claim allowances on fuel, new office equipment and the costs of running your business premises even if that is from your home.
So, as long as you’ve kept the necessary paperwork and can prove assets are business-related, you can claim your new laptop and electricity bill as an expense—rather than adding those figures to your taxable profits.
EARN WHAT YOU ARE WORTH
After putting in a lot of hard work and finally finding their feet, self-employed workers stand to make a lot more money than those hired through traditional means. To be more specific, a 2017 study found that a typical self-employed worker makes £5,000 a year more than the average national salary, despite working 10 hours a week less.
When you’ve got a bookkeeper managing your books and dealing with your taxes and the scary HMRC, the financial benefits of becoming self-employed can be absolutely astonishing. Sole traders can take home everything they earn (minus expenses and taxes), self-employment provides you with the opportunity to finally earn what you’re worth—not what somebody else decides to pay you.
We help take away the fear that you are going to get it wrong and have HMRC chasing after you. We can help keep you on the right side of legislation and allow you to have time to run your business
So if you are planning on becoming self-employed and require some help managing your finances, chat through ways of making it work or just for someone to say ‘yes you can do this’, then contact Accounting On Us today for a free consultation