Is it going to be a terrible idea to go self-employed? (Mortgage)

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I'm currently employed for a great boss who has consistently championed me and given me incredible support over the time I've worked for them. I've outgrown my current role and it is not possible to continue much longer because of my own personal circumstances.

With the same employer there is now an opportunity to change roles, and to work remotely as I now struggle to get into work. I am a solo parent with no support locally, & my DC is in nursery, my current role unreliable commuting times which is very stressful.

However this role is self-employed.
There's no negotiation on this, it's a completely different role, much more interesting & with much more career potential, I'm very keen. I'm not qualified to find the same role elsewhere, but my boss will train me on the job.

The wage is also better and so I can drop my hours which in turn drops my childcare bill a little (and actually see them during the week!) and I wouldn't have the stress & expense of a currently long commute.

Obviously I lose all my statutory rights & my employer pension contributions, moving to self-employment, is there anything else I should be aware of?
I have been self-employed before as I had a couple of small side-hustles before I had my DC and am confident about the admin, filing tax returns etc.

At the moment I have a decent financial buffer in case the new self-employment goes wrong and I need to find another job, but I was hoping to move house & max out my mortgage potential when my child's nursery costs start reducing or they head to school.

I'm worried I'll be making myself un-mortgageable?
I am about to pay off my current mortgage, (still leaves me a decent buffer, I bought my place ages ago when prices weren't bonkers) but I wanted to move to a nicer area for schools etc and have a larger house/garden so my DC can have friends round when they get to that age.
But a single self-employed basic tax-payer with a young child to support isn't going to be a banks first choice as a customer, but I can't lose this opportunity as it really is a career change I've never dreamt I could have.
Any one got any advice?

No massive definite advice, but I believe you need a couple of years accounts for a self employed mortgage. So it might slow you down a bit.

I would still do it though and not miss the opportunity, or wait and time it.

I'm in a vaguely similar transitional phase, building up the SE whilst still employed so we can re mortgage for building work.

Why is the role self employed? If you are moving to another full time role with the same employer it shouldn't be a self employed role.

Long term self employed here.

General rule for mortgages is 2 years of accounts and depending how picky they are they might want to see contracts for upcoming work. You'd be best off going via a broker that knows which lenders will say yes or no. It's a lot easier than it used to be.

On another note when you say the pay is more make sure it really is enough. A lot of people set their rates far too low when they start out. I was one! You need to cover - holiday, sick, pension, time you aren't working, laptop or other materials, I.T, accounting, insurance, advertising, website, email etc.

Make sure you aren't going to get into a mess with disguised employee laws if your old employer is your only client. It's best to have more than one client anyway and spread the risk.

Good luck!

Reading it again it doesn't sound like self employment at all.

Red flags are
No negotiation on your rate - if you're self employed you'd set your own rate usually
Your client is training you
Your (only?) client is your ex employer

There is a questionnaire online from HMRC to determine employment status it's a bit crap as it often says undecided but run this job through it. It seems like your employer is trying to make you self employed to save a few £

'Train me on the job' is probably more 'mentor me' and also procure my services so I have a reliable income.
I'm absolutely free to have other clients, but my boss will pass enough work my way that I have a decent base income.

I hear the concerns about being forced into self-employment.
I wrote a really long opening post to try and avoid that inevitable side-track, but it 100% is self-employment (yes already checked on the HMRC website).

Relived to hear I may only need 2 yard accounts, do you think that's from when I first start my business or I'll need 2 years from next tax year?
I used to have a great mortgage broker, but he was so good he's moved onto bigger and better things!
I guess I should cold call a few mortgage companies and ask directly about what terms they could offer.

When you say the wage is better have you taken into account tax, NI and pension contributions? Not to mention sick pay. I would advise an income protection insurance. Are you aware of IR35 rules? If you're only working for one employer are you actually self employed/ contractor?

I got a mortgage as SE with only one year accounts. Didn't even have my first year lodged. Accountant worked overtime to provide this. It was with Halifax.

Can you ask your boss if you can try it for 6 months and if it does not work go back to your current role?

If you get a good broker, you don't always need two years of accounts. My husband started contracting in August 2018 and we bought a house in December 2019 so he only had one year of filed accounts. He just had to show that he had an ongoing contract for about a year in the future.

This was with him being a director of a limited company though, rather than "normal" self employed so not sure if that made a difference.

If you're self employed he's not your boss he's your client and don't forget that.

Your rates should probably be at least 50% more than the equivalent employed salary for the role to account for lack of pension and holiday/sick pay.

You should also be free to prioritise other work over his and set your own deadlines although obviously you'll want to keep the client happy but ultimately you call the shots.