Wednesday, June 19, 2024
Business, Finance & Tech

Thinking of Becoming Self-Employed? Here Are 5 Things You Should Consider’

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Are you thinking of becoming self-employed and working primarily from home? A move that millions of people make every year, there are many benefits that come with working for yourself. 

However, making this transition isn’t always easy – especially if you’ve worked in an office for many years previously. There are certain things that you must consider before taking the leap, including the following:

  1. What Will You Do?

The first decision you’ll need to make is what type of business you will set up. Luckily, there are plenty of careers that you can go into – whether that’s freelance writing, photography or graphic design

Just keep in mind that you’ll have to have the expertise and skills to undertake the majority of roles – without this, you’ll find that you won’t be able to acquire and retain clients. Typically, people will become self-employed and start a business that aligns with their previous role. 

Once you know what type of business you want to create, then you have to register with HMRC as self-employed.

  1. The Social Situation 

If you’re working remotely the majority of the time, you need to keep in mind that you won’t have the social situation that you previously had within a workplace. 

Of course, you’ll be emailing clients or talking to them via video conference, but you won’t have the daily physical interaction with others – something that many self-employed workers miss a few weeks after starting their own business. 

  1. A Business Bank Account

As a self-employed worker, you’ll want to consider opening a business bank account. This will ensure that any money that’s coming into the business will be kept away from your personal money. You can then pay any annual tax/business expenses out of this account. 

Luckily, there are many business bank accounts out there to choose from, each with little to no fees. 

  1. Business Insurance 

You’ll also want to think about what type of business insurance you need. A must for many businesses working with a variety of clients, it will give you the peace of mind that you’re covered in case anything happens. The type of insurance coverage you get will depend on the industry that you’re working within and the type of business that you have.

The most common types, however, are:

  • Public Liability Insurance – this type of insurance covers loss of property, damages and personal injuries.
  • Professional Indemnity Insurance – this will cover your business if a client is unhappy with the work that you’ve produced and tries to sue you. 
  1. You’ll Have To Complete Your Own Tax Returns 

Another thing to consider when becoming self-employed is that you have to complete your own tax returns. It’s important to know that a tax year in this country runs from the start of April until the following April. When it comes time to pay your tax, you’ll have to fill out a self-assessment tax return for income tax and National Insurance Contributions.

Although you can do this yourself, many opt for professional help from companies like HFM Tax. This way, you’ll have the peace of mind that your tax returns are filled out on time and accurately. An efficient and reliable simple tax returns solution, it will save you the hassle and stress. 

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