Being a tradesman is a rewarding job, but when it comes to establishing yourself as a business, you may have a lot of questions about whether is it worth it to go self-employed or simply find a job as a contractor with a firm.
Many tradesmen in the UK choose the self-employed route because they want to be their own boss and work flexible hours, but the reality is that you need to deal with lots of issues, such as taxes and insurance, when you’re working for yourself. In this article, we discuss the pros and cons of being a self-employed tradesman.
What do I need to go self-employed?
There are multiple questions you need an answer to before going down on the route of self-employment in the UK. First, think about whether you can obtain clients on your own. You need a business plan and you also have to figure out how you can expand your client base in case work dries up on some months.
Next, you need to have some money aside to set yourself up. This doesn’t mean money to start the business, as it costs next to nothing to set up as self-employed in the UK, but instead money that allows you to cope with periods with little or no income.
You also need to consider whether you have a space well you can work, as well as any equipment you might need. If you don’t have it yet, consider whether you have the budget to purchase it. Finally, you need to think about the impact of losing any employee benefits if you are employed now, for example, your employer pension contributions, sick pay, and holiday pay.
Pros of being self-employed
Listed below are the advantages of being self-employed, which, thankfully, are many:
- You can work for different clients and the current projects at one time, so your work will be varied
- You have complete flexibility and control all through your work, which means that you can fit in other responsibilities and commitments you may have, such as childcare
- You can deduct certain costs from your taxes, which may include some utility bills, the costs, and travel bills, provided you incurred those costs to complete your job
- Because you are likely to work from your own business premises, or even from home, you may be able to ditch your commute, and save money and time in the long run
- You can build your own business and grow it every year by taking on more talks and employing contractors to help you
Tradesman insurance from £53* per year
Cons of being self-employed
There are, of course, cons of being self-employed as well, so it’s important to take into account these disadvantages before setting up your business.
- You may need some money to get you started, especially if you have to buy any kind of equipment
- You are the sole responsible person for the failure or success of your business
- You will not get paid for any holiday, or when you cannot work because you are unwell
- Self-employed persons may find it more difficult to get approved for renting a property, getting a loan, or taking out a mortgage
- You need to deal with the taxes and administration of your business, which means that you need to be well-informed when it comes to keeping and complying with any regulations in your field.
- Finally, working on your own a lot means that being a self-employed trader can become a bit isolating
See our self employed public liability insurance policy to keep you covered.