Wednesday 14th July, 2021
Thinking about going self-employed? In this article, our friends at Gorilla Accounting outline some of the great things that come with going solo.
There are around 4.35 million self-employed individuals in the UK as of April 2021. Two of the most popular industries are the construction sector, with approximately 781,000 workers, and the professional, scientific and technical sector with about 650,000 people working in various job roles.
Are you looking to join these ranks and become your own boss? If so, you’ll want to learn a bit more about the benefits of leaving your comfort zone and becoming a freelancer or contractor.
Countless people dream of having control over every single aspect of their career. By becoming self-employed, this dream can become a reality. As a freelancer or contractor, you can make your own business decisions without consulting anyone, and your financial success is not tied to an employer. You can also choose the jobs you want and spend more time with your loved one, since you’re free to make your own schedule as well.
Another reason why people want to become self-employed is the earning potential of owning a business. When you’re employed, you have a set salary and need to negotiate more, ask for a raise or be promoted in order to make more money at the end of the month.
However, when you work for yourself, you can:
Many people are stuck at jobs they don’t care about but, considering we spend hours at work every day, job satisfaction is important for a fulfilled life. When you become self-employed, you can do what you’re passionate about instead of simply working because you need the money.
You also have the opportunity to do more varied work. You don’t have to do the same tasks day in and out, as each project and client are different. So, no day is the same either, which will help you to avoid monotony.
Setting up a business as a sole trader is a simple and quick process. There isn’t much you need to worry about from an admin point of view apart from choosing a name and registering with HMRC. You don’t even have to pay VAT until your turnover is over £85,000 so, if you’re looking to try self-employment to see if it’s for you, this business structure is a great way to start.
From there, you can keep things simple, or add extra bits like a self-employed pension as you and when you need them. Of course, it helps that with Penfold, you can set up a pension just for you in less than 5 minutes.
A great benefit of being self-employed is that you can choose who you work with. If you don’t like a gig or find a client difficult, for example, you can simply opt not to accept the contract. In addition, if you’ve previously worked with a client that sent you a late payment or still hasn’t paid you, you don’t have to engage with them again.
So, when you’re self-employed, you must have several projects going at once, since you don’t want to put all your eggs in one basket, but you have the freedom to make the choices you like and there’s no one supervising you or telling you what to do – so no one can force you to work with a particular client or company if it’s not something you’re interested in.
Self-employed individuals can also get more benefits when it comes to taxes. When you work for someone, your taxes are sorted out through PAYE whereas you have to do it yourself when you become a freelancer or contractor. But don’t let this hold you back! After all, you:
And that's not all. You can trim your tax bill by 25% just by tucking away a portion of your profits into a self employed pension.
As contractor accountants, Gorilla can help you on your self-employment journey. Gorilla Accounting is a technology-driven accountancy firm for sole traders, locums and limited company owners, and they've helped many people manage their accounts. Speak to their friendly team if you want an accounting solutions tailor-made for you.