how to become self-employed electrician.

gwreilly

hi everyone, i am an electrician i currently work for the local council and was thinking of going out on my own. im still quite young but have gained quite a bit of experience in all aspects of the trade with the two companies i have been with ,and would like to give it a shot on my own.the thing is im not quite sure how to go about it ligit was just wondering if anyone could offer any information or advice. thanks.

mizzbiz

Do you have all the neccessary tickets? Unless you are fully qualified (tickets wise), you will have to pay a fully qualified electrician to sign off your work.

Otherwise, if you're all ticketed up, all you need to do is start marketing yourself, have all the tools you need, get some customers via the marketing, inform hmrc that you are now self employed, and get yourself to business link for their free advice and seminars on setting up in business (marketing, business plans, cash flow etc - all free).

PlutoinCapricorn

There are many aspects to this. If you want to be legitimate, you need to pay income tax and possibly National Insurance in connection with your extra earnings, which means that you will need to register with HMRC as a Sole Trader. They will send you tax forms in April, and you will need to file details of your profits. You will also need Public Liability Insurance, and to register for VAT once your turnover reaches £67,000.

What many people do is to build up their business slowly while they are still working for an employer: this way they have some security and regular income while they see how it goes. They do extra work as a freelancer in their spare time. You could start by thinking whether this would be possible. You would still need to register as a Sole Trader.

If you are determined to quit your job and work entirely for yourself, do you know how you would get work and who from?

gwreilly

yes i am fully qualified.im not planning on quiting my job im being paid off due to lack of work and rather than find a company was goin to try self employed.was going to try get the ball rolling first i do have quite a few private jobs on the go and was just goin to advertise and have a few self employed friends who could pass work my way. then see how it goes, if it goes well then i was goin to deal with all the legal stuff then, what do you think?

mizzbiz

gwreilly wrote: »

yes i am fully qualified.im not planning on quiting my job im being paid off due to lack of work and rather than find a company was goin to try self employed.was going to try get the ball rolling first i do have quite a few private jobs on the go and was just goin to advertise and have a few self employed friends who could pass work my way. then see how it goes, if it goes well then i was goin to deal with all the legal stuff then, what do you think?

You MUST register with HMRC if you do any work on the side, even if it doesn't work out. The latest you can register is 3 months after starting out as SE, although they prefer you to do it ASAP. If you get caught doing jobs without registering, you will be in trouble and with £1k fine. You also need to arrange to pay class 2 NICS, although if you don't expect to earn much, you may apply for a low earnings exemption from them.

I understand you wanting to test the waters, and you do have a short grace period (although I don't recommend leaving it too late) but you will be in bother if you get caught. Don't forget, you don't have to actually be turnng over any money to register, you will file your tax return at year end and if there's no income, there's no tax.

PlutoinCapricorn

Something you can do right now is to Google "self employed electrician"!
Some really interesting things come up, and if you invest some time in this you can get lots of useful information.

Unfortunately it is necessary to learn about many things not connected with electrical work, but that is the price for being self employed. The good side is that you pay income tax on your profits not income. There is also a lot of help available and free courses to start you off: www.businesslink.gov.uk is a good place to start.

It is good that you have some work in the pipeline: HMRC do not like it when people register in the hope that things will work out. They now like you to register as soon as you have some work lined up, once you could wait 3 months. You need to keep good records of all your expenses and income, and it is best to give invoices to your clients.

Are you leaving that job completely, or going part time?

mizzbiz

PlutoinCapricorn wrote: »

The good side is that you pay income tax on your profits not income.

You pay tax on income as a sole trader. This means you pay 20% tax on anything over and above your personal allowance (£6450 this year I think).

You only pay tax on profits if you are a Ltd company, and this is after your income tax. Tax on profits (or corporation tax) is @ 21%. So better to self-employ until you're making mega money.

PlutoinCapricorn

I am a sole trader, and I pay income tax on my profits! I deduct legitimate expenses from my freelance income and pay tax on the remainder.