Self Employment in the UK continues to soar. As of the end of the quarter to July 2018, a record 4.6 million Britons worked for themselves, indicating that this is becoming an increasingly popular employment option. Turner Little discusses the key considerations when choosing self employment.
Find work during Self Employment
Look at how you will find the work needed to maintain a steady cash flow when you choose self employment. It is key that you ensure that both your CV and work portfolio are up-to-date and correctly formatted, so you can market your services to clients effectively. Contact recruitment agencies to ensure a swathe of potential clients are aware of your skills and availability.
Also make sure you build and maintain a steady list of business contact via sites such as LinkedIn. This will allow you to establish the contact network necessary to source new business. It is also vital that you establish a strong digital presence, so that new clients can find your business when searching for your industry online. Make sure you create an effective website, as well as engaging social media profiles and blogs, to ensure you can promote your services effectively online.
Determine the right model
Next, you will need to determine which business model you should adopt during self employment. This will depend on the work you are conducting, how much responsibility you wish to undertake and how much you wish to get paid. There are three types of business creation models to consider; establishing a limited company, utilising an umbrella company and setting up as a sole trader.
If you wish to maximise take home pay, establishing a limited company is the most effective way of doing so. You will need to register your limited company with Companies House, as well as HM Revenue and Customs (HMRC) for corporation tax and Pay As You Earn (PAYE) purposes. You will be required to submit your annual accounts to Companies House so they are available for inspection. There are a number of administrative duties attached to limited company directorship. Turner Little provides the miscellaneous corporate services necessary to help you handle these responsibilities.
There are fewer duties attached to working with an umbrella company. Acting essentially as your employer, they will contract your services to clients, raise invoices and collect payment, passing revenue on to you through the PAYE system. After subtracting tax and national insurance from your pay, an umbrella firm will deduct their fee, which is based on your earnings. With this option, you can also claim expenses e.g. for travel and deduct them from your gross income, so you pay less tax.
Sole tradership comes with less administrative duties than forming a limited company. However, you are responsible for paying your business’ taxes and national insurance, so you will need to keep records of expenditure and income so you can submit an annual tax return to HMRC. There is one major downside to sole tradership. You will be personally liable for your firm’s debts and bills, so with this option you could put your own assets e.g. your home, at risk.
Get a bank account
Whichever business creation model you adopt, it is essential that you invest in the financial infrastructure necessary to handle your firm’s monetary obligations. The legal process of setting up your own company can require a business bank account. Turner Little can advise you on UK bank accounts, ensuring you have the financial infrastructure necessary to launch yourself into the world of self employment.
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.