Working for yourself advice.

[dietert1]

More than once i got a contract as freelancer responding to job offers online and in newspapers looking for employees. If one can make an interesting offer, why not. During recent years it seems they became more afraid of IP leakage. Again, if they give you a good contract, why not. Also it happened they provided an office in their building during the first three months, to better know each other.
Financial reserves can be invested in other places as well, instead of founding a company. Anyway, it depends a lot on the family. Without family working independent is a health risk.

Regards, Dieter

[nctnico]

As well as other jobs I have worked for myself for about 15 years.
Do I make a fortune ? No pretty much most years a small loss.
So not much point doing it other than to fill my time and keep my hand in with software and electronics.

The main problem is competition driving down prices.

That is a sign you are in the wrong business. One of the most important parts of being self employed is to find customers to whom your expertise is most valuable and thus you can charge a tariff that makes it worthwhile. Before I started being self employed fulltime, I made a spreadsheet with all my ongoing expenses and from there calculated the number of hours I needed to work annually while charging a certain tariff. Some may call that a business plan  .

[mikeselectricstuff]

I did ask him to think about viability of starting a company whilst the chip shortage

of course that could be an opportunity - consultancy work redesigning existing products to use available parts

Unless you find a good niche & a ready market producing products yourself is very high  risk as there can be substantial outlay with uncertain returns - consultancy/contract work is probably the best option to explore.
If he is very familiar with particular chip families, see if the manufacturer has a registered consultant type program ( e.g. Microchip design partner) - not sure how common this is with other manufacturers.

[Wilksey]

Hi All,
Thanks again for all of your replies, quite a lot of information to pass along.

He is familiar with 8051 micro's, but that was more due to the fact they are used in legacy equipment rather than anything else, plus he has used them for "years".

There is a lot of talk about consultancy work, where would one go to find said consultancy work?  Is it these "6 month" contracts you see on job sites or is it some other avenue to explore?

He is UK based near Bristol(W-S-M to be more precise).

Thanks.

[nctnico]

Hi All,
Thanks again for all of your replies, quite a lot of information to pass along.

He is familiar with 8051 micro's, but that was more due to the fact they are used in legacy equipment rather than anything else, plus he has used them for "years".

There is a lot of talk about consultancy work, where would one go to find said consultancy work?  Is it these "6 month" contracts you see on job sites or is it some other avenue to explore?

Look on freelance websites, forums, make a LinkedIn page, call former employers / collegues, etc and you'll find jobs. Personally I'm not keen on long term contracts; they smell too much like regular employment to me but they could prove useful.

[Wilksey]

I believe he has signed up to freelancer, upwork and another, he has a minimal LinkedIn page, I told him to update it and he said he would once the redundancy has finalised, calling ex workers etc is not an option for him unfortunately.

I was trying to think of forums he could post in but I couldn't think of any off the top of my head, do you have any suggestions for any?

There is that IR35 which I think is going away next April, I told him to speak to some accountants and engage a decent one, there are several around here who are good at things other than accountancy, a husband and wife team for example, she is an accountant and he is a lawyer who is sh!t hot at employment law.


Thanks.

[Psi]

Some good tips.

- Work from home for as long as possible, until you're making so much stuff that you run out of room and have no choice but to rent/buy an office.  Too many people assume if they're running a business they need to have an office/store etc. Don't waste money on it until you have no other choice.

- Find a neish,  look for a product that many people want but does not exist in the format people want, or maybe it does exist but is really expensive for no real reason other than its a neish product.    You want something that, if you can make cheaper, lots more people will want to get one.

- Reading forums and asking people what products they always wanted but are too expensive can work sometimes.

- Stay away from mains voltage stuff, if you need power use an off the shelf mains psu and run your stuff on low voltage DC.

- If you don't want to make anything you can look at repair.  There are so many super expensive neish products that fail and which the manufacture will not repair or charges a ridiculously amount for.  Sometimes just finding the right sort of business and asking "What products do you have that keep failing and are insanity expensive to repair" can discover opportunities.   To make money in repair you really need to specialize in a particular type of product so you can get to know it really well. Once you know all the common ways it fails repairing it is easy. but it can be quite hard to track down faults in the beginning.

[AndyC_772]

There is that IR35 which I think is going away next April

!!!

No, it's not. What's going away are the reforms to the public and then private sector, which placed responsibility for determining IR35 status on the client rather than the contractor.

This is good in that it means contractors should no longer have to just accept a blanket 'inside IR35' determination made by HR departments. If we're confident that our contracts are outside IR35, then we can make that assertion rather than simply accept a higher tax bill that may be completely unjustified.

However, it's still vitally important that we draft our contracts with full knowledge of the 'disguised employment' tests in mind. They've not (yet) gone away.

I recommend getting in touch with Qdos Contractor and asking about their insurance and contract review services.

[Edit: my 4000th post and it's about sodding IR35... sob!)

[tom66]

The tax arrangements for contractors in the UK has nearly always been stupid.

We should have a common taxation framework that covers independent contractors (who bear the expenses of running their own business) and employees (who do not), rather than the bizarre arrangement of paying yourself up to one limit and then taking dividends in another.  'Expenses' are things like an office, or a new oscilloscope, but they should not be accommodated merely by lower income tax.  The present arrangements (if outside IR35) seem to benefit contractors considerably in income taxation, which feels 'wrong'.  Also, there is no 13.8% NI supplement which an employer normally pays.

I can see the reasoning behind IR35 reform but it attacks the wrong part - we just need to have a better tax system.  Politics!

[Wilksey]

There is that IR35 which I think is going away next April

!!!

No, it's not. What's going away are the reforms to the public and then private sector, which placed responsibility for determining IR35 status on the client rather than the contractor.

This is good in that it means contractors should no longer have to just accept a blanket 'inside IR35' determination made by HR departments. If we're confident that our contracts are outside IR35, then we can make that assertion rather than simply accept a higher tax bill that may be completely unjustified.

However, it's still vitally important that we draft our contracts with full knowledge of the 'disguised employment' tests in mind. They've not (yet) gone away.

I recommend getting in touch with Qdos Contractor and asking about their insurance and contract review services.

[Edit: my 4000th post and it's about sodding IR35... sob!)

Ah, I knew something was changing, but as it doesn't apply to me I just ignore all of the emails, but I am sure one was titled "IR35 A thing of the past", I know what it is but I just figured the title was self explanatory, perhaps not, something his accountant can advise on in any case.

[Kasper]

[...]where would one go to find said consultancy work? [...]

Local tech meetup groups can be good.  If there aren't any near your friend, tell him to find a pub with space, organize a meetup and post an invite on local social media groups.

I haven't done much contracting but I found that to very fruitful and more fun than the freelancing sites.

[AndyC_772]

we will no longer be proceeding with ... the reversal of off-payroll working reforms introduced in 2017 and 2021

 

[jc101]

we will no longer be proceeding with ... the reversal of off-payroll working reforms introduced in 2017 and 2021

 

Indeed.  Seeing the 1.25% dividend tax increase is remaining too. Give it a week or two, could be all change again...