Thinking of going self emloyed - advice needed

Cam93

hi all, advise needed please!

I'm thinking of going self employed and have been for several months now due to stress and being unhappy.

At present I am PAYE in management position with my employer of 3+ years. 

I'm thinking of going back on the tools (which feels like abit of a backstep) but I feel I would be much happier without the constant stress abd would simply go to work, do my job, go home and it would actually be less working hours too which is a benefit with a small family.

I've accepted the 'backstep' with myself and I am happy to do this as I feel I will have better quality of life and even take a bit of a paycut if it meant that too. My partner is very supportive and jusy wants me to be happy - the last 6 months or so I've worked 60+ hour weeks abd have been physically sick with stress, loosing sleep, not eating so loosing weight etc - but thats not the poiny of this thread.

Back on topic, im thinking of going self employed back pn the tools which is a scary thought as I've always been PAYE, my plan is to be a sole trader and obviously I'll have the benefit of being able to offset tax against earnings etc so in principle I'd actually earn/take home more money pcm.

Can anybody offer advise or pointers when going self employed? I know there's work out there but it feels very risky in the current climate when I have a secure job I want yo walk away from.

I know ill need to fork out to buy a van - but I can claim the tax back on this, is that right? How ecactkh does it all work?

If im a sole trader and paid into a SIPP, how would I get the tax back on the SIPP money? Can I transfer ab existing pension pot into my own SIPP ?

What else can be claimed/off set?

I dont want to go Ltd or be vat registered as I see no benifit in doing so - I expect to earn 45-55k as a subby 

Brynsam

Plenty of info here: https://www.gov.uk/browse/business but sounds as if you are pretty clueless, so a session with an accountant would be an even better starting point to ensure you kick things off on the right foot. Hope things work out for you.

Savvy_Sue

Being self-employed doesn't necessarily reduce your stress levels, and being a subby even less so. 

is it possible to look for another job, or to address the reasons for the stress within this job? 

Marcon

Cam93 said:

Back on topic, im thinking of going self employed back pn the tools which is a scary thought as I've always been PAYE, my plan is to be a sole trader and obviously I'll have the benefit of being able to offset tax against earnings etc so in principle I'd actually earn/take home more money pcm.

Can anybody offer advise or pointers when going self employed? I know there's work out there but it feels very risky in the current climate when I have a secure job I want yo walk away from.

I think you're in danger of seeing self employment as some sort of golden escape route from a job you don't like. I'm not sure what you mean by 'the benefit of being able to offset tax against earnings' but it certainly doesn't lead to the principle that you'd earn/take home more money. Many new traders make a loss in their first (and often second and third) years of trading - you can't just write off things like the purchase of a van against tax in one go. It depreciates over the years and that's all you can claim.

Unless you can be sure you have some ready clients, there's a real danger that you will simply run out of cash, and running out of cash is the single biggest cause of business failure. As suggested earlier, get yourself proper professional advice. You can't afford not to.

Cam93

Marcon said:

Cam93 said:

Back on topic, im thinking of going self employed back pn the tools which is a scary thought as I've always been PAYE, my plan is to be a sole trader and obviously I'll have the benefit of being able to offset tax against earnings etc so in principle I'd actually earn/take home more money pcm.

Can anybody offer advise or pointers when going self employed? I know there's work out there but it feels very risky in the current climate when I have a secure job I want yo walk away from.

I think you're in danger of seeing self employment as some sort of golden escape route from a job you don't like. I'm not sure what you mean by 'the benefit of being able to offset tax against earnings' but it certainly doesn't lead to the principle that you'd earn/take home more money. Many new traders make a loss in their first (and often second and third) years of trading - you can't just write off things like the purchase of a van against tax in one go. It depreciates over the years and that's all you can claim.

Unless you can be sure you have some ready clients, there's a real danger that you will simply run out of cash, and running out of cash is the single biggest cause of business failure. As suggested earlier, get yourself proper professional advice. You can't afford not to.

Apologies, my OP wasnt the clearest.

I would basically subcontract to various employers, I have many contacts in various company's that are screaming out for my trade skills.

I have no intention of being a 'business' I would be a sole trader that subcontracts on a labour only basis. Therefore my day rate of X is all profit less mileage abd other expenses.

You mention many struggle to make money in the first  year - as above I would be a labour only sub contractor and the current going rate in my location abd field of work is significantly higher than what I currently earn in my PAYE management job

Marcon

Are you planning to register for the Construction Industry Scheme? Sounds like you should at least consider it: https://www.gov.uk/what-is-the-construction-industry-scheme

tacpot12

Just doing labour-only subbing will take a fair bit of pressure off, but being self-employed carries extra responsibilities and there is less protection for self-employed people if their industry is hit by some mishap. 
You need to make sure you that you are factoring in all the extra costs you will have as a self-employed person, e.g. holiday pay, sick pay, life insurance, tools insurance, liability insurance, pension. 

I would try to find a good commercial insurance broker and ask for some advise on what liability insurance you can buy to protect you if something bad happens on site that turns out to be your fault. e.g. if you kill someone or something you work on fails and causes damage.

Socajam

Adding to all that listed above, are you going to have an emergency fund and life happens fund to cover any problems that  crop up?

Lomast

Just wanted to point out a sole trader is 'being a business '

Petriix

If you bought an EV van then it would qualify for a special rate of tax relief so you could offset the full cost. There is also a significant investment allowance available for you to purchase equipment and offset the entire cost.

You should do some research and draw up a business plan to see how viable it would be. See if you can speak to a business advisor and an accountant to get the plan a bit clearer. 

Cam93

Marcon said:

Are you planning to register for the Construction Industry Scheme? Sounds like you should at least consider it: https://www.gov.uk/what-is-the-construction-industry-scheme

Yes.
At present all subbys that work for me  we pay via CIS and it suits everybody so I would register CIS myself also when going SE