High-Earners Lead Self-Employment

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The UK has seen significant growth in self-employment over the past several years, and a recent report has shed new light upon the nature of this trend. According to a study by an economic think tank, it is high-earning individuals who have been the driving force behind the increase in self-employment.

Self-employment undeniably plays a major role in the UK economy at present. It has been a rapidly-growing area for several years now, accounting for half of the employment growth in the UK during that time. There are currently just under five million individuals in the UK who are self-employed (including those who have a second job or “sideline” in self-employment alongside an employed role). This is well ahead of many other types of somewhat non-typical employment. For example, the UK’s agency workers currently number only around 850,000.

The Resolution Foundation examined trends in self-employment, and found that higher-earners were disproportionately represented in the growth of self-employment over the past several years. Since 2009, 57% of self-employment growth has been made up by what the foundation called “privileged” self-employed individuals – those who are well-qualified and work in higher-paid fields. These include professionals in the accountancy, legal, and health sectors among others. These “privileged” self-employed people commonly achieved income in the £45,000-65,000 range annually, much more than that of the average UK worker.

There is such a divide between these workers and other self-employed individuals, the Resolution Foundation says, that the self-employed are now not so much one group as two quite separate and distinct ones. Those who do not fit into the privileged group not only earn less, but are more likely to be underemployed and to receive tax credits.

The Resolution Foundation’s Adam Corlett says: “Rising self-employment has been the biggest jobs story of the last decade… but behind the headlines the real recent growth area for the self-employed has been in lucrative sectors such as advertising and banking.”

Many news stories and much popular discussion about self-employment growth has focussed on typically lower-earning individuals finding new and more lucrative opportunities by striking out on their own. However, this is in many ways at odds with the picture of self-employment painted by the Resolution Foundation’s report, in which individuals who are already well-qualified high-earners are heavily represented. Many of those who have been the subject of public discussion, such as self-employed drivers for delivery services or drivers for Uber, have found themselves in a work situation which the foundation describes as “precarious.”

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The Costs of Moving Your Home Business to an Office

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A lot of businesses start out based in the founder’s home. Most likely, your spare bedroom, garage or even shed was turned into a home office to accommodate your new business.

But if your business has been very successful, it may be starting to outgrow its home office and you might consider moving it into a real, purpose-built office outside of your home. This can be an exciting time, but also an expensive one. It is important not to take this step without properly considering all the costs involved.

The Cost of the Office

The first, most obvious cost associated with moving your business into a real office is that office’s own price tag. Purchasing an office is very expensive, so unless your business is really thriving or you are prepared to risk a large chunk of savings you are more likely to rent. Make a careful and realistic assessment of how much potential you think your business has to expand as a result of moving to its new home, and compare this to the rent to ensure the cost is worthwhile. Remember that this expansion is not going to be achieved overnight, so make sure that the cost of the rent will not have too big an impact on your business in the meantime.

Bills

Rent isn’t the only ongoing cost associated with an office. You will also have energy bills, which are likely to be greater than the addition that working from home makes to your household energy bills. On top of this, there may be bills for services associated with or required by the office such as cleaning. If you are renting an office which includes a cleaning service, this is probably included in the rent but not necessarily so it is worth double checking. Make sure you also know whether any repair or maintenance bills fall to you or whether this is entirely your landlord’s responsibility.

Furniture and Equipment

You may be renting a fully-furnished office, ready for you to move in and pick a seat at one of the handy desks. On the other hand, you may well be renting part-furnished or unfurnished office space, in which case you will need to supply the necessary furniture. This is essentially  a one-off cost, but it can be a hefty one so look into the cost of everything you will need beforehand so you can factor it into your decision. If you are expanding into a dedicated office in order to take on employees, include the costs of supplying them with equipment. While it’s not part of the cost of the office, don’t forget that when you reach the stage of hiring those employees there will be costs associated with this outside of just paying their wage.

 

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