Self-Employed versus Employed?

For most of my locum life, I have been self-employed. It was a bit scary at first, not having any job protection, effectively being on a zero-hours contract, no paid holidays, no contribution from the Firm towards your pension, all of which can be a daunting prospect, especially if you’ve previously been employed, and it was for me, but after I had got used to it, which I did pretty quickly, I came to prefer it. It’s like the first time you go in the sea, cold at first, but you quickly acclimatise. Or you get out quickly.

The main benefit to being self-employed is the amount of tax you pay, you can set off expenses against gross income which you could not do if you were employed. This is not the place, and I am not the person, to talk about what expenses you can set off, an accountant is the person for that. You can do your own accounts and tax return, I have done it and it’s not as complicated as I thought, but for most of my locum life, I have used the services of an accountant. I’m currently paying around £300 plus VAT, and find it saves a lot of time and aggravation.

You should keep copies of all receipts for expenses, including of course, for any accommodation you stay at, if like me, you sometimes work at places which are too far from home to commute to daily.

When I worked through agencies, a few wanted me to set up a limited company but I personally do not like this idea, it involves a lot of additional administration because of the company rules you need to comply with and frankly, it isn’t necessary.

It’s perfectly okay to work in a personal capacity, like a sole trader, and that is what I have done for all of my locum life. Having agreed my hourly rate with the Firm at the start of an assignment, I render an invoice at the end of each week, with my name and address, the same for the Firm, a short sentence which reads ‘To professional charges for locum services rendered for the week ending ………..’ followed by the hourly rate multiplied by the hours worked and a total. Include your bank details and take a copy before you hand it over.

I have seen some more fancy versions of the above with a table showing hours worked by reference to days and that’s fine as long as it contains the essential information.

I’m not registered for VAT, but check the current threshold rate which is currently £85,000.

#Nomad