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  >  Lifestyle   >  Career/Blogging   >  4 things to consider before becoming self-employed
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*This self-employed post is a collaboration
Becoming self-employed is a huge decision and one that many struggle to to make. Taking that leap from a safe, salaried job to going freelance or working for yourself can be terrifying. But it doesn’t have to be! I’ve been mostly self-employed for the last six years and I’ve found it both an incredible and stressful experience. While it is a huge amount to take on, and can be quiet intimidating at first, it has also given me so much freedom in my life, not least the ability to travel full time. But whether you’re a traveller or simply want to be your own boss and work in your pyjamas. There are a few things that can make life a lot easier when becoming self-employed. Knowledge is power, so arm yourself with all the facts before you jump. (Pic by Giorgio Montersino)

4 things to consider before becoming self-employed

Are you freelance or will you create a LTD company?

This is important because it will change the way you are paid and entitle you to different benefits. Basically it means whether you create a company and then pay yourself a salary, or whether people pay you for your services. Make sure you read into both and the tax implications for each. Particularly during furlough, there were restrictions for LTD companies so those unable to work during the pandemic would have struggled.

Don’t forget your self-employed pension

It’s so easy for freelancers to forget that with freedom comes responsibility and that comes in the form of organising your own national insurance and pension contributions. Without your workplace paying into your pension, you will be left to set it up and ensure you’re paying into it consistently or you may regret it later. It’s also a good idea to research pensions that are specifically designed for freelancers or self-employed people as they may come with specific benefits.

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Get income protection

One thing that puts people off freelance life is the unreliability of work/pay. For instance, if you’re unexpectedly taken ill – you don’t get sick pay when you’re self-employed. One thing to consider is whether income protection insurance would make you feel more secure. Lifesearch offer insurance that provides peace of mind by paying a percentage of your salary if you’re signed off due to illness or injury. This is usually 50-70%, but can be up to 100% of your income. Particularly if you live alone or are the breadwinner in the household, it could have a huge impact and provide support for both you and your family.

Keep all your receipts and create income/outgoings spreadsheets

The least fun part of working for yourself – taxes! Everyone who is self-employed and earns over £1,000 per year is required by law to file a self-assessment tax return. Whether you do this yourself, or get an accountant/book-keeper, it is important that you keep records of everything. That means all your income, plus any expenditures, all need to be clearly logged with receipts. Trust me, future you will thank past you for doing it right from the beginning and keeping everything neatly organised.

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