Working in business consultancy, I often get asked about practical life matters that arise from running your own business, as opposed to being employed by someone else. There’s a startling lack of understanding about what being self-employed really means, extending from those with little experience of business life, right up to senior executives. Regardless of what others’ perceptions are, it is important that YOU understand exactly what your position is and what your rights are.
In work: If you undertake work for another company as a subcontractor or freelancer, whether in-house or on a remote basis, it is important that both you and your client understand that you are not an employee. This means you don’t have the same legal protection as employees – but also that you are not required to abide by all the same guidelines, as you have not signed a contract of employment. Instead, you have an equal business arrangement based on the work you produce, which should be respected by both sides. Just as someone might hire a builder to work on their house – they don’t ‘own’ the builder, but it is still important that the builder provides a professional service with regard to the tasks they have promised to deliver. This is how you should approach your work.
In life: Many people wrongly believe that if you’re self-employed you don’t have the same financial rights or capabilities as employed people. This is not true. It can be more complex, however, so it’s important that you are organised. For example, if you are self-employed and wish to obtain a mortgage, you’ll need to provide proof of your income. An employed person can merely provide a payslip, but you will be required to present at least two years of accounts records (if your business has been running for more than one year). These will need to be signed off by Her Majesty’s Revenue & Customs (HMRC) before a lender can accept them. This may seem unfair, as an employed person could be made redundant at any time – but if you are running your business properly, there is no point wasting time worrying about such things.
