Self-employment or freelance
Article reviewed: 2013/01/22 | Next review due: 2014/08/10
There is encouragement from the government for people to become self-employed and at first it seems attractive, especially if you have recently become unemployed or redundant. Although one of the main attractions of becoming self-employed is no longer having to work for somebody else there are several disadvantages you should consider. These include not being certain of having a regular income, having to arrange your own sick pay and pension and probably having to work long hours. Additionally, training in either practical or management skills may be necessary.
If you are considering self-employment, you can discuss this with an adviser from the citizens-advice-bureau to get advice on the different ways of trading and which would be most appropriate for your business.
The business could take one of three legal forms: Sole trader, the simplest way of starting a business; Partnership, similar to a sole trader except that two or more people run the business; or a Limited company, giving the business a separate identity from the people who run the business and is more complicated to set up.
In addition to one of the above legal forms, self-employment can also involve one of the following trading practices: A co-operative, a business which is collectively owned and controlled by the people who work in it, a minimum of two people must be involved; and A franchise, an agreement which allows the person buying the franchise the right to run a branch of a business that someone else has set up.
There are a number of important factors to consider when becoming self employed, including financial accounting, taxation, employing other people and business insurance. Seek advice with the Citizens Advice Bureau for further information.
- Citizens-advice-bureau: Citizens Advice service helps people resolve their legal, money and other problems by providing free, independent and confidential advice, and by influencing policymakers