Self-employed vs Unemployed

JeandePierre_2

I quit a job a year ago due to stress and lack of fulfilment, and am certainly happier and healthier now. I have a war-chest of hard-earned and carefully managed (e.g. ISAs) savings, originally intended for my retirement years, but this seems like a good use for them now. I can't claim any benefits (that I know of) because I have well over £16,000 in savings. I can afford to be without work for a year or more, which is just as well: my expertise is in a *very* specialised area, so it may be some time before a suitable opening appears.

On the advice of a friend I registered as self-employed and am making voluntary NI contributions. I have no 'income' to speak of, and I'm now wondering if I would be better off to be unemployed: at least I would get reduced entry to various venues and events, and would not have to do the painfully complicated self-assessment tax forms.

Can anyone spell out the pros and cons for me?

Thanks in advance.

Conor_3

Firstly, the self assessment forms are painfully simple if your gross income from Self Employment is under £15000 - it's a single sheet of A4.

Secondly, why the hell did you register self employed if you didn't intend being self employed? There's no tax advantage to be gained as you can claim back the tax on your savings (non tax free) by submitting a P50 at the end of the year.

I can't honestly think why anyone would recommend you registering as Self Employed unless you were actually going to start up as self employed.

LittleVoice

I'm trying to think of reasons for registering as self-employed rather than unemployed.

Here goes, my guesses:

as you have some income, you are doing some work and it may be as easy to stay as in some way employed rather than signing on and off frequently;

you expected to be making a bigger income from self-employment (or your view of what is "no income to speak of" is not the same as someone else's);

pride in having self-employed or contractor on your CV may appeal more than describing yourself as unemployed;

some training is available free to employed/self-employed people but not to those on JSA (also, of course, some on JSA get free training not available to those in work!).

Regarding being registered as unemployed - you could have been able to claim contribution-based JSA (payable for the first 6 months after the end of normal employment. Your case is complicated because you "quit". Normally this would prevent your claiming JSA straight away unless you could prove you were justified in resigning.

Though you may expect to receive benefits (like reduced entry to venues), this is often restricted to those on income-based JSA, not contribution based.

vrypleased

I am assuming you don't have the option of registering unemployed, as to register for this you have to be seeking employment (whether you are claiming benefit or merely signing on to get your stamp paid)... so choosing self employment is a way of avoiding hassle from the jobcentre to look for and accept any job? If this is the case, then creativity is the answer... so long as you can 'demonstrate' you are actively seeking employment you will be left to simply sign on the dotted line each fortnight.