As we reported last week, the number of people who are now self-employed has risen significantly in recent years. However, not all of those people are earning money solely from their own business venture. Last week, the Financial Times reported that there has been a surge of people who are now both employed as well as self-employed. Statistics show that 90,000 of self-employed people have a second job, and 320,000 employed people are self-employed as a second job – figures which have been consistently rising since 2005.
Self-employment has risen in popularity due to the flexible working hours and freedom of being your own boss. 43% of the growth in UK jobs over the last year has been down to self-employment, showing how working for yourself has become more of an attractive option as the economic climate has changed. However, many of the drawbacks of self-employment come from the challenges of starting up.
When a business is new, there is often little money coming in, and with living costs still needing to be paid, this puts many people off. However, maintaining employment during this period alleviates that risk. The income arising from employment covers living costs, as well as many of the costs of starting up a business, meaning that the income from the business can be banked as profit or used to help the business grow.
If you’re thinking of becoming self-employed as well as employed, there are a few important factors to consider:
- Time – While the internet has increased working hours, and allows people to continue to work away from an office environment, it is important to be realistic about whether you have the time to take on a second job. Your business may need to be conducted during certain hours, which could conflict with your current job, or if you have a family, you may not want to spend your evenings working. Do some calculations and decide if it’s really a feasible option.
- Tell HMRC – If you do decide to become self-employed alongside your regular employment, let HMRC know so you can begin to pay the appropriate taxes. You will need to complete a tax return every year as well as paying National Insurance contributions.
- Check your accounts – While employment often makes self-employment a little easier financially, it’s still essential to do some sums and decide if you can really afford to become self-employed. If your current wage is going towards the new business, can you also afford your living costs? If you’re having any problems or confusion, be sure to contact a chartered accountant for professional guidance.
If you’re considering becoming self-employed alongside your current employment, contact MCC Accountants today. We specialise in helping self-employed workers, small businesses and start-ups and our team of chartered accountants can help with everything from assessing your funds to starting your own business to staying tax efficient. Contact us today on 0161 707 1500 or send us a message through our contact form.