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What you need to know about going self-employed

It seems today that everyone is on their grind. Whether working hard to progress up the career ladder or cultivating a rewarding and profitable side hustle, we have entered into a new age of people taking their careers into their own hands.

In fact, more people than ever now generate a significant proportion of their income through self-employment. 5 million people were registered as self-employed in the UK as of December 2019. That figure looks set to grow in the future, as the allure of running your own business, and more online tools available to help you do it, has made being a self-employed easier than ever.

However, being self-employed is not as simple as it looks. There are many legalities to consider as well as marketing your business or services properly. So, what exactly does it mean to be self-employed? And what should you consider before taking the plunge and going self-employed?

We look at these questions in the article below.

What is self-employed?

Being self-employed means working for yourself. This means you are not directly employed by any company and you are responsible for all of your business transactions, taxes and finding work, clients, customers and the like.

Many self-employed people work as freelancers in creative and entertainment industries, as it gives them freedom to choose the jobs they want and when they want to do them. Other self-employed people run their own businesses and offer services and products. Commonly, people working in hair and beaty industries are self-employed.

What to consider before going self-employed?

Before you go self-employed, there are several things you should consider. Unless you already have a client or customer base, it is important to ensure you have a decent amount of money saved. You may not make money straight away and need to prepare for this.

You should also do your market research and ensure you have a product or service offering that customers will want. It is important to be highly organised and self-starting as a self-employed worker. You will need to keep records of your income and outgoings related to your business for your self-assessment tax return.

What to remember when your self-employed?

Business banking

Keeping your personal and business money separate is essential when setting up as self-employed. Getting a registered business account is a good start. You will be able to accurately track you income and stay on top of your business spending.

Tax registration

You must register yourself as self-employed with HMRC in the UK before you start trading. Getting this set up before you start your self-employment is vital to stay on top of your tax accounting and to ensure you can file your self-assessment tax return with ease.

Marketing your business

As a self-employed worker, you will be responsible for finding your own clients, getting your own work, and selling to your customers. Marketing your products or services effectively is essential to ensuring your ongoing success.

Invoicing and accounts

As a self-employed freelancer or business owner, it is important that you get paid on time and correctly by your customers and clients. You might want to employ the services of an accountant or accounting app, but get your invoicing and accounts in order.

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