How do I become self-employed?

Making the jump to being self-employed can seem scary, but in reality it's easier than you might think. Here's how you can make the transition.

Many people have found that becoming self-employed is the best option for them, either because of the freedom it offers or the opportunity to take home more earnings. However, actually making the transition into freelancing can seem like a big step, especially if you're not sure what you need to do.

Luckily, becoming self-employed is easy. All you have to do is register with HMRC, and you'll be counted as self-employed and able to take on freelance work. However, there are a few choices surrounding this that you'll need to consider first of all. Here are some of the questions you'll need to answer:

How much admin do you want to take on?

One option available to you is to form your own limited company, however this involves quite a lot of work. Your tax return will be more complicated, and there will be day-to-day admin to take care of. This can be a very financially beneficial option however, as long as you're willing to put in the work.

Alternatively, there are options that reduce the admin for you. You could form a limited company and take on an accountant, for example, or work entirely through an umbrella company that will handle your taxes for you. These things cost money, but save you time that you can then use to take on more paid work.

Is flexibility or your finances more important?

Similarly, you need to think about how much you're willing to pay for flexibility. One of the best options for this is becoming a sole trader, which does not come with a lot of admin and allows you complete freedom surrounding how you want to work. However, this is not the most lucrative option.

Umbrella companies can be fairly free, but again come with a cost. Running your own limited company also gives you a lot of control over your working methods, but the admin you will need to undergo ties your hands a bit. However, this option provides you with more take-home pay than the others.

Do you want to look for work yourself?

Another aspect of being self-employed is being able to choose what work you take on. This can be a great freedom if you're used to working on dull, uninspiring projects in your current job. However, finding contracts can be hard work, and for some people it's not worth the effort.

Recruitment agencies often take on self-employed workers, finding them temporary contracts rather than permanent jobs. It means you won't have to worry about marketing yourself, but again, this costs money. Of course, if you're looking forward to networking and building your own reputation, you won't need to bother with an agency.

Why Brookson One?

If you're not sure about the answers to any of these questions, Brookson can help. As specialist contractor accountants, we can help you get setup and working in as little as 24 hours

With over 20 years' experience helping self-employed professionals make the most of their finances, we can help you increase the amount you earn as well as freeing up valuable time for you to focus on paid work. We can help make sure you're paying yourself in the most tax-efficient way, increasing the amount of your income that you can take home.

If you'd like to learn more about how we can help you, book a free consultation to chat to one of our highly trained advisors.

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