Leaving my safe reliable job to become self employed. Do I take the risk?

[emsiewill]

I need the help of you knowledgeable and wise mumsnetters to make a possibly life-changing decision. Apologies that this is so long - just typing it out is good for my decision-making process.

I currently work 30 hours per week in a job that I (mostly) enjoy for a company that I've worked for for almost 6 years. The hours are very flexible, so fit in very well with my life, and the pay is good for the local area. I have many friends, socialise a lot through work, and have some responsibility and duties that ensure I don't get bored.

However, I do get pissed off with the company from time to time; they don't always treat people well, and expect a lot from you, there is little to no prospect of promotion / salary increase at the moment, and certainly not without me being prepared to put in a lot more effort and hours, and even then, prospects are limited.

On Friday I went to see an IFA who I saw early last year. At that time, she was thinking of expanding her business, and wanted to take someone on on a self-employed basis. However, nothing came of it, mainly because I wasn't that keen on going self employed at that point. She had contacted me again to see whether I would be interested in joining her; her business has finally moved (which was part of her original expansion plan), and she also needs to replace her administrator.

She has asked me if I would be interested in joining her, initially to cover the administrative duties, plus some more technical stuff that her admin woman was not qualified to do (and I am). She will pay me a fixed amount, and then there will be quarterly bonuses. The idea is that I can help in her expansion of the business, potentially becoming registered as an IFA myself. The scope of the role will be as wide as I want to make it, really.

The fixed amount she will pay me is about ?200 per month less than I currently get - not something we can give up lightly. However, there is potentially scope to make much more than I am currently making. She is happy that my hours remain about the same as I am doing now, and that I can have the flexibility that I need. Her office is based in an enormous house in the middle of beautiful countryside (as opposed to the business park stalked by hoodies I'm in at the moment).

SO - the question is, do I take the risk? I am feeling quite positive about the whole thing, and am at a point in my life where I think I should maybe move out of my comfort zone. But some things I need to know / think about:

Is being self employed a real pain?
What are the steps I need to take if I decide to become self employed?
What sort of questions should I be asking her to ensure that I am going in with my eyes open?

What do you think?

As I say, sorry this is so long, thanks for making it this far, please give me your opinions /advice...

Anyone? Or is it too late on a Sunday for this kind of thread?

Bit late at night . More sense in the morning.

OK, here's a bump for a Monday afternoon.

How much business do you need to bring home as much as you do now. Remember if you work from home overheads are very low.

I read this but thought I missed something ...would you be self employed? Is she suggesting a partnership?

Yes, she is suggesting a partnership, and I would be self-employed. To be honest, I don't think she really knows exactly how it will work, she just wants someone else on board who can help grow the business.

As she is so vague, I need to make sure everything we are agreeing is clear, which is why I'm asking here - I'm too vague myself really.

Misread sorry.

£200 less before or afer tax.

Self employed would mean making savings in your tax bill. You'd need an accountant.

Do you think the quarterly bonus will be substantial.

I would go for it.

A couple of qs

Is the £200 per month less than what you get now before or after tax? I ask because when you are self employed you have to pay employers and employees tax/NI so you may end up with less than you bargained on.

From the sounds of what you are doing, you may not qualify for self employed status check here for more info.

Also, your current salary is also paid when you are on holiday and possibly when you are sick. You need to factor this in to your self employed package. You may need to take out insurance to cover you in case of sickness which would be an additional cost.

Hi Emsiewill
Sorry you haven't got many replies yet. I'm sure that will change!
I went self-employed when ds2 was a baby and I don't regret it for a second.
I don't work in the same field as you, so I'm not sure how much help i'll be but feel free to ask any questions you'd like.
The only thing I'd say outright is that the danger of being self-employed is saying 'yes' to every bit of work that comes along because you're worried about work not coming along the next week.
It's quite scary to turn down work because you want a holiday/a break/a day off but, if you don't, you end up worn out.

sorry that para should read
Is the £200 per month less than what you get now before or after tax? I ask because when you are self employed but fall outside IR35 (which it sounds like you do as you are only working for one employer etc) you have to pay employers and employees tax/NI so you may end up with less than you bargained on

"Employed or self-employed?
Employee

If you can answer 'Yes' to all of the following questions, you are probably an employee.

Do you have to do the work yourself?
Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
Do you work a set amount of hours?
Can someone move you from task to task?
Are you paid by the hour, week, or month?
Can you get overtime pay or bonus payment?
Top

Self-employed

If you can answer 'Yes' to all of the following questions, it will usually mean you are self-employed.

Can you hire someone to do the work for you or engage helpers at your own expense?
Do you risk your own money?
Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
Do you agree to do a job for a fixed price regardless of how long the job may take?
Can you decide what work to do, how and when to do the work and where to provide the services?
Do you regularly work for a number of different people?
Do you have to correct unsatisfactory work in your own time and at your own expense?"

Overall, I think that you have to decide whether you will spend the next ten years wondering what might have been, if you don't take this job (it sounds from your post as though you might...)

My only question is whether you will actually be self-employed. As far as I can work out, you won't, at least not as far as the Inland Revenue are concerned (they have a whole list of tests - are you paid by one person, do you decide where you work, and so on, and as far as I can see, you would fail most of them!).

In which case, I would slightly question her about how she runs the business - if she can't get that right, I would be wondering about the rest to be honest.

And to answer your question, if you are self employed, it's no hassle at all really. A good accountant will pay for their fees (only a couple of hundred quid) for what they save you on your tax bill). I've been self-employed since I was about 25, and it doesn't bother me at all. If you have enough of a head for figures to think about becoming an IFA, you'll find it easy enough to sort out.

And if you do, you just need to tell the tax office. You could ring them now, and ask them whether that kind of job would qualify as self-employed. I would be pretty prepared to bet they'll say no....

Thanks to you all for the time and effort you have put into your replies.

From your messages, it looks like I need to question her more about the exact terms of the offer, as I say, she has talked about it being "not an employer / employee relationship, more a partnership", but I think that is just her idea of how it will work, rather than in actual legal terms.

But I think whoever said that I could spend the next ten years thinking "what if" has summed it up, really. But my naturally cautious side will not sit down and shut up.

Just had a good chat with a friend who I work with who has done the type of job I would be doing. She has warned me of the possible pitfalls, but her opinion (based on her knowledge of the company we work for at the moment, and her knowledge of me) is that I have nothing to lose...

She also advised me to speak to the admin person I would be taking over from to find out more about what she does day to day, and what the IFA is like to work for.

She has definitely given me food for thought, but any more morsels gratefully received.

emsiewill, it sounds sensible. How well do you know this IFA? Can you trust her? If you are going into partnership with her, it's like getting into bed wih someone. And make sure you put the terms of your arrangement in writing. All the best.

Also consider any perks you get currently - sick pay? pension? mat pay? paid holiday? You will almost certainly lose all of those.

I would just advise a bit of caution - the grass isn't always greener and it sounds like you have a good job. I left my old job which I loved (fascinating work, lovely people, wonderful social life and terrific pension) when I moved out of London when dh and I married. I got a local job and really missed all the social side of my old job. My new employers were tighter than a badger's arse and I didn't get any benefits at all.

Good luck with whatever you decide.

Funnily enough, one of the things my friend said she thought might be a downside would be going from working in a big office to basically working on my own for long periods of time.

Of course, I would probably be able to access MN from work, which I can't do at the moment. Surely that's enough reason to go for it

If you're only working for her you definitely won't be self employed.

A partnership is a legal entity, but also implies that it would be a shared business - one where you both determine the nature of the business, its vision, development,etc - and it doesn't sound like she's really offered you this either.

I think, from what you've said, she is way too vague to make this a really serious offer and your current job sounds like it has an awful lot going for it.

Having said that, if you want to work for yourself I would personally recommend it - been self employed now for 10 years. But, there are serious downsides, and you need to be prepared for all of them. Talk to as many people as you can that you know are self employed in real depth about their situation, and ask for as much advice from them as you can.

Whatever you decide, though - good luck!

OK, so since my last post, I've had a meeting with the admin woman, who was very positive about working with the IFA, not a bad word to say about her.

I've clarified the self-employed issue (I would definitely be self-employed), and I've also clarified a number of other issues I was concerned about (eg will I be seriously down on what I've been earning - answer = no).

So I've decided I'm going to go for it, I'm going to hand my notice in on Monday [scared emoticon] (would be good if I had a clue as to who my line manager is so I know who to hand it in to - but that's a whole other story, and also part of the reason why I want to go).

So I'll be leaving at the end of the year, and starting after the Christmas holidays.

This is really scary.

Well done. Go for it. I wish I had some skill that would enable me to go self employed, but I can't imagine a career that would pay me lots of money to lounge about reading magazines and drinking tea.