Setting up a business
Despite the benefits, registering as a business should not be rushed into unless you have started to sell work, or be paid fees for any other freelance work such as undertaking workshops, commissions or assisting others.
A number of recent arts graduates may be surviving on a mixture of welfare benefits and part-time work, and stepping into official ‘trading status’ can be a big step.
Remember: it is perfectly legal to be an ’employee’ of an organisation or company (e.g. having a part or full-time job working in a shop or restaurant) and be self-employed at the same time.
It’s important to be aware of the term ‘business’. Some people refer to themselves as being ‘self-employed’ whilst others may lay claim to the term ‘freelancer’ which really means working for companies as a ‘contractor’ rather than as an ‘employee’ for set lengths of time, hours, days, weeks, months, etc. When you are properly employed by an organisation or business you are covered by employer’s insurance policy and your income tax and national insurance contributions are deducted at source. When working as self-employed or freelance you are responsible for paying your own tax, NI and insurances.
However, even if you do have a full or part-time job, it is wise to read your employment contracts especially if working in hi-tech industries or have specialist roles within larger firms. Usually for most employed work (P.A.Y.E), there are no restrictions on running a business (being self-employed) outside contracted hours. However, it is wise to read your employment contracts that there are no restrictions on running a business outside contracted hours.
Many creative people who trade also rely on another source of income from employment. It is useful to have a part-time job during the first years of trading for increased financial support whilst establishing a practice or creative business.
From the moment you decide set up a business or become self-employed, it can be a good idea to allow some time before commencing; this is called the ‘pre-start-up’ period and could last between 8 and 12 months. This time can be used to undertake research and attend business courses. Registering as self-employed is relatively straight forward, though you need to fully understand the process. You should really register as self-employed if you start spending money on your art or design practice, but you have to register by law, which is free by the way, when you start earning any money from sales or other freelance opportunities.