There are many perks to being self-employed; set your own hours, be your own boss and even have the freedom to work wherever it pleases you. It’s no wonder that many people are turning to the self-employed route more and more in the modern day. However, there are also plenty of far-reaching implications that some people fail to see. Especially when it comes to the legal side of being self-employed.
In which case, here are the most important things you need to remember when it comes to your self-employment, business and the law.
Understand the Legal Implications
As a self-employed individual, it is vitally important to both understand your rights and obligations from a legal standpoint. Remember, you are responsible for the success and failure of either your business or self-employed activities, so it is upon you to ensure everything is above board. Which means researching and understand everything thoroughly.
Business legislation and ruling are continually updating, putting your business at risk if you fail to keep up to date with these changes. Best judgement and a sound understanding of the developments in legislation is needed in order to protect yourself in the long run.
Researching the full breadth of your rights and responsibilities can seem like a daunting endeavour, but it doesn’t have to be. There are plenty of resources available; both from the government and independent outlets. The more your business grows, the more you will need to know, as workers rights and your responsibility as an employer will also become important to keep in mind.
Register for Tax
One of the first things you need to do when you start dipping your toes into self-employed waters is to get your taxes in order. This is especially important to remember if you are used to employers directly taking tax out of your wages. If you don’t continue to do so when self-employed, you could find the implications of tax evasion much more trouble than they’re worth. Some circumstances could see a hefty fine and even a stint in prison depending on the severity of the charges.
Fortunately, in the modern world, it has never been easier to do your taxes. And you have a multitude of choices on how to actually do it (meaning a few excuses when you don’t).
Register online or by phone, as a sole trader, limited company or even a partnership (if two or more people go into business together). The wisest choice may be to set yourself up as a limited company, even in the early days, as this soundly separates business and personal money. A good safety net should you find yourself in any legal trouble later in the life of your business.
On the whole, registering to pay your taxes is the easiest way to protect yourself as both a business and self-employed individual. If nothing else, remember to do this above everything else.
Business Insurance
One of the worst setbacks for your business can come from legal action being taken against you, especially if you have no funds in order to protect yourself. This is where a robust insurance policy needs to be in place in order to protect your fledgeling enterprise. However, there is actually a wide range of business insurances to choose from and deciding which is best for your business is a very important step.
There are some things you may need to consider before choosing a policy:
- The number of employees at your establishment.
- Assets requiring protection.
- What business you are running.
This means you could be looking at getting anything from car insurance, professional indemnity insurance and even public liability insurance. Whether or not your business needs each and every one of these policies completely depends on what you get up to on a daily basis. So, it means assessing the day to day activities of the business and where they fall under insurance wise.
Such cover will probably expand the bigger your business and self-employment grows. So, keep that in mind and make sure you update all insurance policies as it does so.
Create a Refund Policy
A big issue when it comes to any customer-facing business is that of returns. The better your return policy, in general, the better customer satisfaction and general happiness becomes overall. It all ties into user satisfaction and the ‘happiness’ factor that business thrives on. Any successful refund policy should be clear, concise and give people all the information they need for legitimate returns.
Put this policy as a page on your website and have someone – preferably a legal professional – look over it if you’re unsure. It is, after all, better to be safe rather than sorry in such cases.
Conclusions
On the whole, protecting yourself on a legal level as a self-employed individual should be at the top of your priority list. Not only can it protect your own long-term interests, but it also prevents your business from suffering unnecessarily as well.