Self-Employment

In this guide:

• Becoming self employed
• What self employed jobs are there?
• Advantages of self employment
• Challenges
• Self employment & childcare
• How to start
• Self employed second jobs

Becoming self employed

For many parents, becoming self employed is an attractive prospect. Often, by the time children come along, we’ve been in the workplace for a decade or more. Corporate life can lose its shine and working for a boss you don’t respect can be demoralising.

Others are seeking a career that gives them more time with the family, better flexibility and more ownership of the way they work.

In these situations, self employment can seem very appealing! But before you take the plunge, there are various considerations to make. Weigh up the pros and cons for your specific circumstances to help you make an informed decision.

What kinds of self employment jobs are there?

The number of self employed people in the UK is growing all the time, partly as business are seeking to cut costs and be more flexible. Many people are choosing to go freelance, using their professional skills to set up as an independent consultant. You can read more about freelancing here. But there’s also an army of workers in jobs that have always been typically self-employed, from cleaning and plumbing to milk delivery and childminding.

The first step is to do your research. workingmums.co.uk features many self employed jobs, so if your current position doesn’t easily translate to self employment, or you’re interested in entering a new field, checking the job listings is a good place to start.

What are the advantages of being self employed?

A lot of people are keen to become self employed to give them more flexibility. This is true for many self employed opportunities. If you need to work around school and childcare, self employment can often be a good solution.

Being your own boss is also one of the big self employed benefits. Many of us have worked for others and felt we could do a better job without them. There’s certainly real satisfaction in knowing that your achievements are down to you alone.

Some people also find that they are financially better off once they work for themselves. There are many self employed jobs that pay well. A cleaner working for an agency, for example, will generally receive a lower hourly wage than a self employed cleaner that finds their own business.

What are the challenges?

The biggest and most obvious challenge is that self employment carries more risk. If you’re running your own business you can’t guarantee that you will receive a steady, reliable income.

A childminder, for example, might have a few months where they have fewer children to look after than they would ideally like. If your business provides a service, you might find that all your jobs come in at once, and other months are quieter.

You also need to allow for the fact that you won’t receive holiday pay or sick pay, so if you’re not working, you’re not earning.

A further challenge is that you need to look after your own accounting. You need to create invoices, receipts etc and track all your income and spending over the course of the year. You will also need to complete a self-assessment at the end of the tax year and pay your tax bill by the deadline.

If you are thinking about becoming self employed, but might have a baby one day then you should be aware that maternity rights for self employed people are more limited than for those who are employed. Other considerations could include:

• Ensuring Cashflow
• Saving for, and paying your own tax
• Saving for your pension
• Insurance – ensuring you are covered for the work you do
• Paying your mortgage and other finances
• Your workers rights

You can read more tips on things to consider when you become self employed here.

It’s important to be realistic about what being self employed can mean for you. Make sure you think through all the implications: from how you’ll fit in holidays to whether you’ll be able to get a new mortgage as a self employed person.

When taking on a self-employed contract, you should also be aware of the pitfalls of becoming a ‘disguised employee‘.

Self employment and childcare

Not everyone who’s self employed is able to work around school or normal childcare hours.

Wedding planners and photographers, for example, will often have to work at the weekend and in the evenings.

Many self employed people operate as a home business, which can bring further challenges such as juggling work with responding to your child’s needs.

Childcare can be tricky in these situations, but there are ways to find flexible childcare resources if you need them.

How to go self employed

Once you’ve weighed up the positives and negatives of being self employed and decided it’s the right move, there are various steps to take.

The first is to register as self employed with HMRC, which you can do on the government website. There’s lots of useful information on the site to help you.

Bear in mind that companies that turn over more than £85,000 a year must be VAT registered. Find info on this here.

You must also make sure you have the right insurance in place. What you need depends on the kind of business you’re running, but could include public liability insurance, employee liability insurance or professional indemnity insurance.

Some self employed people choose to buy income protection insurance to cover their bills should they be unable to work due to illness or injury. Speak to a financial adviser for guidance about what’s needed. Read some great financial tips for the self employed.

Self employed second jobs

If you’re after a self employed job, one option is to ease your way in by starting off as a second job. This won’t suit all self employed work, but is ideal if you’re starting up a new venture in your spare time – such as an eBay or Etsy business.

It allows you to test the viability of your new business and build up more slowly. Once you’re generating a steady income, you can leave your employed role to focus on being self employed.

You still need to register as self employed, and should let your employer know that you have additional income so that you don’t get into trouble with the tax man.

With any luck you’ll go from strength to strength and love being self employed. Research has found that self employed people suffer less stress than their employed counterparts – with the right planning, you’ll feel the same!