Becoming a self-employed mortgage broker

that_girl

Hello

I’ve been working as an employed mortgage broker for 6 years and I’m thinking of taking the step and becoming fully self-employed.

I would really appreciate any advice and indication of what overhead costs will look like.

I’m not looking at setting up an office, just looking to work from home.

Thank you in advance.

Marcon

Plenty of general info at https://www.gov.uk/browse/business/setting-up

Being self employed is probably not a great idea - trading through a limited company (not nearly as complicated or expensive as it might sound) will give you much more protection.

A session with an accountant is probably your next step. Before doing that, sit down and make a list of likely overheads, not forgetting essential insurances, professional registrations and similar. Some costs are unavoidable, others (e.g. advertising) can be managed, but are likely to be necessary.

AskAsk

you can trade through a limited company if the income is high enough to warrant setting up a limited company.  it does provide protection if you are sued.

there are also tax advantages of setting up a limited company.

you can also trade as a self trader and do your own tax return.

Marcon

AskAsk said:

you can trade through a limited company if the income is high enough to warrant setting up a limited company.  it does provide protection if you are sued.

there are also tax advantages of setting up a limited company.

you can also trade as a self trader and do your own tax return.

The level of income is irrelevant; it's the level of protection which matters. Setting up and running a limited company costs very little more, and is not much more complicated, than being self employed.

AskAsk

Marcon said:

AskAsk said:

you can trade through a limited company if the income is high enough to warrant setting up a limited company.  it does provide protection if you are sued.

there are also tax advantages of setting up a limited company.

you can also trade as a self trader and do your own tax return.

The level of income is irrelevant; it's the level of protection which matters. Setting up and running a limited company costs very little more, and is not much more complicated, than being self employed.

you can get professional indeminity insurance to protect you though.  going through a limited company you would need an accountant as you need to submit company accounts and if you have a lot of income, the accountant can also help you save tax.

if you are not getting a big income, then the self employed route is cheap as you can do your own tax returns.

Sandtree

You can do your own company house returns as well, there is no legal requirement to have an accountant and its not that complicated to do it yourself - but less hand holding than self assessment as its anticipated most have or employ accountants.

As long as there is sufficient revenue a decent accountant will pay for themselves but for a startup incorporation is more likely to be for liability limitation than tax efficiency. 

Annisele

Are you planning on being directly authorised or going the appointed rep route? For a mortgage broker I suspect that makes a pretty big difference to overhead costs.

Dox

AskAsk said:

Marcon said:

AskAsk said:

you can trade through a limited company if the income is high enough to warrant setting up a limited company.  it does provide protection if you are sued.

there are also tax advantages of setting up a limited company.

you can also trade as a self trader and do your own tax return.

The level of income is irrelevant; it's the level of protection which matters. Setting up and running a limited company costs very little more, and is not much more complicated, than being self employed.

you can get professional indeminity insurance to protect you though.  going through a limited company you would need an accountant as you need to submit company accounts and if you have a lot of income, the accountant can also help you save tax.

if you are not getting a big income, then the self employed route is cheap as you can do your own tax returns.

PI cover is no guarantee of anything, given how hard it is to make a successful claim. If you want to sleep at night, form a limited company and use that from day one.

If you are capable of doing your own accounts on a self employed basis, you don't normally need an accountant to submit limited company accounts. You just submit them to Companies House using the form on their website - as easy and straightforward as submitting your self assessment tax return online. No audit is required for small companies if at least two of the following apply: annual turnover of less than £10.2m, assets worth no more than £5.1m, 50 or fewer employees on average. 

The only 'extra' cost for running a limited company is £13 a year to submit your Confirmation Statement (again, it is done online and is a doddle to do).

Tax saving (actual or potential) is equally relevant to both self employment and running your own company. Taking advice from an accountant at the outset will ensure you set off on the correct/best path.

haras_n0sirrah

I made the move from employed to self employed in april 2018
For me it has worked out very well but I have a lot of introducers via housing associations and have been in the industry 14 years so get a lot of referrals 
When I made the move I could not approach any clients from my old employer. Some have found me but it is for them to approach me (make sure you have a linked in and Facebook presence)
The biggest reason brokers fail is lack of clients. Think where you will get your clients from and remember it will take at least 3-4 months to be paid in the current climate (as it is taking forever for mortgage offers to be issued) so you need a large financial cushion behind you but the biggest thing is knowing how you will get clients