Should i be self employed

The Institute of Fiscal Studies highlighted sectors most directly affected by the pandemic and its restrictions: accommodation and food arts and leisure childcare domestic services non-food and non-pharmaceutical retail passenger transport personal care. Skills to succeed in business Success as a small business owner largely relies on the strength of your product or service.

However, you must also possess the following qualities to thrive: Creativity - You must be innovative, imaginative and have the initiative to push your business forward with new ideas. You'll also need drive, determination and enthusiasm to make them reality. Knowledge - Having a strong understanding of your market and customer is vital, while the willingness to listen and adapt to their ever-changing needs is also key.

Leadership - Owning and developing independent projects, as well as managing a team, should come naturally to you. Organisation - You must be focused and goal-orientated, able to set clear and realistic objectives. Working well under pressure and having strong time management skills are also important.

Self-belief - You'll need the confidence to take risks and responsibility for your decisions, as well as the appetite to network with individuals and other organisations. Questions to ask before becoming self-employed Am I becoming self-employed for the right reasons? Does my business idea have longevity? Am I self-motivated enough to make a success out of it?

Will becoming self-employed fit in with my lifestyle? Would I enjoy working on my own? Can I afford to become self-employed? How will I fund my business? What type of business should I run? Do I have the right support network in place? Is the grass always greener? You'll develop skills and learn as you go along - but if you'd like some reassurance, you might be ready once you've: mastered a professional approach - When starting a business, you need the confidence and motivation to market yourself from day one.

Many think that charging a reduced rate or offering to work for free is what's required to build a client base, but remember that the work you're doing will still add value to your client's business or project and you should be compensated for this. Having the right skills, passion and business acumen are more important factors for finding success. By creating a long-term business plan , or a weekly to-do list, you'll have a clearer picture of where your business is heading.

It's a slow process, and you may encounter rejection from clients along the way, which can be disheartening. You'll need the motivation, confidence and enthusiasm to be looking for potential opportunities at every turn when you're starting out. Find out more Take a look at GoCompare's guide to self-employment.

How would you rate this page? On a scale where 1 is dislike and 5 is like Something went wrong. Please try again. Tell us why If this list sounds anything like you, then seriously consider starting fresh and being your own boss.

I know that I have never regretted it! Yes, everyone wants this. However, to succeed out on your own, you have to understand that being self-employed does not mean a shorter work week — in fact, it usually means a longer day and week. With self-employment, you make the rules of your schedule, but time not working is time that is not paid. This trade-off is one that you appreciate and are willing to embrace.

Are you a control freak and a micro-manager? Are you Type A personality? I know that I am. M work and my ideas are mine alone and the only criticism I get is from my clients positive or negative. People generally consider me to be friendly, gregarious and outgoing and humble. However, in a work setting involving a team project, I turn bossy and controlling. Being self-employed, I have made a conscious decision not to grow my business to more than one full-time employee.

Whatever you decide to do with your one person business, you need to have an ability to translate your passion to your customers and clients. The self-employed thrive on an unbridled enthusiasm for their work. Otherwise you will quickly burn out and get discouraged. Being self-employed does not mean talking about yourself all the time to anyone who will listen — quite the opposite. You need to listen to conversations in your industry, listen carefully to your customers and your clients and become a fantastic analytical thinker.

Be able to repeat back to people what they are saying to you and offer solutions to their problems. You are your brand and your business, and if something goes wrong or there is a complaint, you need to embrace the criticism, make improvements and move on. Working alone and often from your home can be isolating and lonely. This table is a generalised summary of 'indicators' used to judge whether you are employed or self-employed. It is unlikely that you will meet all the indicators for either employment or self-employment.

You are given rewards other than in cash for your work, such as vouchers, free or cheap meals, a company car or shares. You tend only to be paid in monetary form — cash, cheque or bank transfer — rather than 'in kind' although some businesses might engage in 'barter' transactions. Your engager can move you from job to job as needed — for instance, you may have to cover for someone who is sick.

You only do the particular job which you agreed to do, unless you subsequently agree a change in terms of providing your services.

You have one job at a time, or a small number of regular jobs, such as one in the morning and one in the evening. You have a recognised role at the place where you work — for instance, people may report to you, or you may be listed in the internal phone book. You do not run a business from home or other location, although you may work from home if this is approved or demanded by your employer.

When you need another position, you apply for jobs for example by contacting the Jobcentre or an employment agency, or answering advertisements online or in the newspaper. You have a business which you may run from home — for instance, you advertise your services, you take appointments, you have your own business cards, you are VAT registered. You may send someone else to do the work for you, or arrange for a job to be done and supervise others who you engage to help you.

For example, if you are a gardening business, you might take on a job landscaping a 2 acre garden. You would be unlikely to do it all yourself, but you would quote a price for the job and in turn pay other people to help you. An important legal case Autoclenz Ltd v Belcher [] confirmed certain workers who had been classified as self-employed were in fact employees with a contract of employment. The company involved was a large one offering car valeting and related services.

The individuals concerned in the case all had written contracts, the terms of which were quite explicit in saying that they were being engaged as self-employed contractors rather than as employees. This was because, in the view of the courts, the workers had only one choice: to sign up on the terms dictated by the company or seek work elsewhere.

Once this principle — looking at the reality behind the contracts — was applied, all sorts of findings of fact by the employment tribunal justified its conclusion that these individuals were working under a contract of employment. It was also noted that the company provided, at the time under consideration, all the equipment and materials, including jet washers, vacuum cleaners, sponges and chemicals. In summary, the Supreme Court agreed with the earlier Court of Appeal ruling, which in turn concluded that the employment tribunal was entitled to find that the individuals were working under contracts of employment.

Although this was an employment law decision, rather than a tax law decision, the above case gives a good summary of what the courts will look at when deciding issues of employment status.

It is particularly important to note that the parties cannot necessarily rely on the paperwork or contract in place, if the reality of the situation is different. Skip to main content. Am I employed, self-employed, both, or neither? Updated on 28 July Why is it important to know if I am employed or self-employed? So be wary if: you are offered work and given a choice of being an employee or self-employed; someone you are going to work for tells you that you are self-employed.

Is there a law that says whether I am employed, self-employed, both or neither? The general rule is that you will be: An employee if you work for someone and do not have the risks of running a business.

Self-employed if you run your own business on your own account and are responsible for the success or failure of that business. To decide your position, you must first consider the basis on which you work. It is important to distinguish working from something that you do as a one-off, a hobby perhaps or as a favour for a friend.

When am I likely to be employed? You are likely to be an employee if: You can be told what work to do, as well as how, where and when to do it.

You have to do the work yourself. You can be moved from task to task. You are contracted to work a set number of hours and get a regular wage or salary, even if there is no work available.

You have an employment contract and work for a business which is not your own and in which you are not a partner. The person or company you work for gives you time off for things like sickness and holidays, which is usually paid subject to the terms of the employment or according to statutory rules. When am I likely to be self-employed? You are likely to be self-employed if you meet the following tests: You agree to do the work, but you can send someone else to do the job for you, for instance, a builder who can send another person with similar skills in their place.

You probably have several customers at the same time. You can do the work how, where and when you like, for example, a writer who agrees to write a book and can write whenever they want to, as long as they meet the deadline set by the contract.

You run a business and take responsibility for its success or failure, such as a joiner who has to redo unsatisfactory work and cannot charge the customer for the time spent redoing the work. You provide the main items of equipment or specialist tools you need to do your work, such as a pick-up truck, or scaffolding. I am still not clear whether I am employed or self-employed If you are still not clear you should consider the factors set out in the table below. What help do HMRC provide?

I work in the gig economy, what is my position? I work in the construction industry, what is my position? I am a partner in a partnership, what is my position? There are additional tax responsibilities if you are a partner in a partnership and these are explained in our guide to self-employment which covers: Partnership tax returns Other tax considerations of being in a partnership Leaving a partnership it is possible to no longer be a partner but the partnership continues to trade There is further information on setting-up a partnership and registering a partnership on GOV.

I have set up my own company, what is my position? Can I be employed and self-employed at the same time? Can I be neither employed nor self-employed? Yes, you can be neither employed nor self-employed but still active. Volunteering You may be gaining work experience by volunteering. If you give your time for free, you should not need to worry about tax and NIC.

These can include things like: travel expenses including home to work base postage and telephone protective clothing. Training The key question to ask is: are you carrying out tasks for someone or are you merely seeing how a job is done — except perhaps for some minor actions you undertake along the way?

This situation can occur in a broad range of jobs, from apprentice electricians to trainee solicitors and accountants. You will probably still pay tax and NIC unless you fall under the employer sponsored courses exception. If you are enrolled in a government training scheme, it should normally be clear whether you have employee or trainee status: If you are an employee, you will generally have a direct contract with the person to whom you provide your services; Trainees will generally have a contract with the scheme organiser, which may involve work experience or training with a work provider.

It will usually be clear from your contract and the surrounding circumstances that the primary purpose is to train you, although you might incidentally do some productive work for your work provider. Where can I find more information? For more information about who is an employee and who is self-employed for tax and NIC purposes: read the general guidance in the section called 'Employment Status' on GOV.

Table: summary of key points on employment and self-employment This table is a generalised summary of 'indicators' used to judge whether you are employed or self-employed.

Employed Self-employed Method of payment Paid a regular wage by the day, week or month Invoice the client for work done Who has control over how work is done? The way you do your work is supervised You are trusted to do the work yourself — as long as the final product is up to standard Where do you do the work? At the place required by your engager At a place you decide, although some jobs might have to be carried out 'on site' When do you do the work?

When you need another position, you apply for jobs for example by contacting the Jobcentre or an employment agency, or answering advertisements online or in the newspaper You have a business which you may run from home — for instance, you advertise your services, you take appointments, you have your own business cards, you are VAT registered Who does the work?

You do the work yourself You may send someone else to do the work for you, or arrange for a job to be done and supervise others who you engage to help you. An important legal case on status An important legal case Autoclenz Ltd v Belcher [] confirmed certain workers who had been classified as self-employed were in fact employees with a contract of employment. So given the clear written terms of the contract, how did it all go so wrong for the company?

What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill? Do I need to complete a tax return?