Though perhaps not the most glamorous job in the world, tradespeople can earn a generous living with the right skills and marketing strategy. Below, we’ve put together some common misconceptions about becoming a self-employed tradie that could change your career path.
You’ll pay less tax
Although there are many benefits to self-employment, like being able to choose your own working hours and the projects you work on, you won’t pay less tax being self-employed. The truth is that self-employment means that you’ll forfeit the rights to holiday pay, sick pay, and a company-funded pension, yet you still have to pay a hefty tax bill at the end of the year. Depending on the size of your tradie business, it might be more tax-efficient to open a limited company and deduct a salary and dividends rather than being a sole trader, but you should speak to a professional accountant before doing so. Rules around IR35 are due to change in April 2021, so if you’re a tradesperson working for one organization, you should speak to a professional as soon as possible to avoid future liability problems down the line.
Working for yourself is risky
In the United Kingdom alone, more than five million people are classed as self-employed, and the figure is rising thanks to remote working and the COVID-19 pandemic. Although economic uncertainty will affect the rate of home improvement projects in the years ahead, the pandemic has actually increased business for most tradespeople, with consumers spending more time doing up their homes due to self-isolation and lockdown restrictions. If you’re good at your job and you’re working in a town or city with a high demand for your services, you shouldn’t have any difficulty in keeping yourself busy. To reduce your risk, make sure you invest in a strong digital marketing strategy, have the right insurance policy in place to protect you and your customers and use PongoPay to accept client payments.
You won’t need to work as long/as hard
There’s no getting away from the fact that working for yourself gives you more freedom than if you were to work for someone else, and you can fit work around family responsibilities and hobbies. Becoming your own boss is something that so many of us dream about, being able to wake up when we want to, take a day off when we feel like it, and earn as much or as little as we want to. But the harsh reality is that self-employed people work harder and longer than those in full-time employment. Once you’ve wrapped up on one project, you’ve got to worry about accounting, marketing, and finding your next client, too. Working for yourself in the trade sector means that no two days are the same and that you’ll sometimes be juggling one or two too many projects, but the rewards are almost always worth all of the hard work.
Did any of these misconceptions surprise you? Let us know and check back soon for more.