Many people find that being self-employed is a dream come true. You get to be your own boss, on paper, that’s great! You can work the hours that you want, you get to pay yourself, yeah, that’s fantastic!
But, there are a number of things that you should be aware of when it comes to being self-employed. We’ll run through some of the things you should be clear on before you take the plunge to become self-employed.
Now, when you are in full-time employment, your employer generally deals with your taxes. Now, when you’re self-employed, you need to understand that these are your sole responsibility, no one else’s.
If you fail to keep a proper track of your taxes, you could face a fine from the HMRC, who are the Government body that ensure everyone is paying their taxes properly.
It’s also up to you to keep a track of your expenses so that you can keep a track of everything that you can claim tax back on when it comes to the time to do your tax returns.
If you’re going self-employed, you should have already accounted for start up costs but you should bear in mind that there are also maintenance costs associated with running your own business for things like any accounting software you may be running.
Things like equipment and software need to be kept updated and also be properly maintained. If you employ someone who works from home, a home office will have a number of maintenance fees so that they can keep their equipment and software running properly.
This is perhaps the big shock to most people. If you’re working for yourself, it can lead to unsteady paydays. You may also find that this happens more in the early days of your self-employment.
You’ll have to plan accordingly and ensure that you’re set financially, just in-case you get a couple of late payments, you still need to be able to pay your bills and put food on your table.
This is one of the main reasons that people decide to work for someone else. When you’re self-employed, your retirement funding rests solely on your shoulders.
The benefits of working for someone else when it comes to your retirement is that you have an employer who will match your contributions but being self-employed, you’re in charge of all of your retirement contributions.