If you are thinking about going self-employed there is a lot that you should think about. It can be easy to think that it will be really great to be your own boss and you can work the hours you choose and fit it around your home life with great pay and lots of freedom. The reality is not like this and it is worth making sure that you are aware of what it could be like before you start.
It is necessary to be aware of any laws that will apply to you in your field of work. Anyone that is self-employed will be required to declare their income for tax purposes and therefore fill in a self-assessment tax return. This needs to be done yearly and you will need to pay the tax that is required. This is something which you will be responsible for saving up for because you will not pay as you earn, like you do if you are employed but you will have to pay it once or twice a year. This means that you should make sure that you are aware of how much you are earning and put aside money that you need to pay in tax so that you have it there when you need to pay it.
You will also need to be aware of any specific laws in the area you are working and make sure that you have any insurance in place that is necessary.
You may find that you will not have regular pay like you would in employment. When you are self-employed you need to find the sources of income and sometimes this can be difficult. You may not be able to find enough work to give yourself the level of pay that you are used to. You also may find that the work is hard and therefore you get paid a low hourly rate. It is worth bearing in mind that there is no minimum wage when you are self-employed and depending on what you do, you may need to charge below minimum wage to compete for work.
It is also worth noting that you cannot get universal credit if you are self-employed. This means that if you have a low income and you hope to get some benefits to help you out you will not be able to get it. The government expects people to look for a job if they are not being paid enough so unless you are unemployed you cannot claim and in this case you would have to prove that you are looking for employment.
When you are self-employed there is often a lot to do as well as the actual job. You will need to keep your accounts, look for customers, send out invoices, order stock and things like this which you will not be being paid for. Obviously, it can be good if you can incorporate the cost of your time doing this into what you charge for your jobs, but this will depend on what the going rate is and whether you can stay competitively priced and do this. You may also find that you will need to work a lot of hours, particularly at the start, to get yourself established.
There is also no job stability when you are self-employed. You have no idea whether you will have work in the future and this could be stressful for some people. Of course, employment could end through redundancy but it is less likely than not being able to find work when you are self-employed.