Is it the same as owning your own business?
Being self-employed is not quite the same as owning and running your own business. Self-employed workers work for themselves they decide when and where they work. Self – employed workers carry out projects or contracts but may not be the person who owns the business itself. Many workers in the construction industry such as painters and decorators, plumbers and carpenters are self-employed. Some self-employed workers call themselves ‘freelancers’ particularly in the business, finance and IT sectors.
For more information and advice about self-employment and contracts of employments, take a look at Citizens Advice.
Are there different types of self-employment?
Yes. They include:
- operating a franchise;
- part of a portfolio career;
Why is self-employment growing?
Around 4 million people in the UK are self-employed (source ONS). There are lots of reasons why more people are choosing to work in this way:
- Finding a full time permanent job is tougher than ever before. So people are trying self-employment as a way of making a future for themselves.
- Employers still need workers. Getting someone who is self-employed to do the work as a project is cheaper and more flexible than recruiting a full time worker.
- The internet means that people can work from home or a small office.
- Some people need to be flexible in how and when they work.
How can I tell if being self-employed would suit me?
Think through your reasons for taking the decision to become self-employed.
Begin by asking yourself the following questions:
- Do you know exactly what you are going to do?
- Does it use your strongest skills?
- Can you make enough money doing it?
- Do you know where you want to be in five years’ time? Will self-employment help you get there?
Many of the issues regarding self-employment have both positives and negatives. How you view them will help you decide if this is the right move for you.
Advantages and disadvantages of self employment
Possible advantages of self-employment
- You get the benefit of the work and effort you put in on a day to day basis
- You will be independent and have more control over what you do and when you do it.
- You will be able to choose between working full or part-time. You can also set your own hours, and you can end up with a better work/life balance.
Possible disadvantages of self-employment
- The responsibility for success or failure lies with you. You are responsible for losses as well as profits, have no paid holidays or sick pay.
- You will have no one to manage you to keep you on track or provide support. You could end up working on your own for much of the time.
- You may have less time with your family as business commitments mean you work long hours.
- You will pay your own tax, and with no company pension scheme, you will have to plan your own pension.