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Going it alone: The challenges of self-employment

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Running a business doesn’t have to involve renting offices and employing teams of people. For many, self-employment represents the best option. But that’s not to say there aren’t challenges, as Tim Smedley discovers

The self-employed have always been too easily overlooked. But things are changing. Once on the economic fringes, they are entering the mainstream. Since the recession, the number of people in self-employment in the UK has increased dramatically. Of the 5.4 million businesses operating in the UK, four million of them are individuals going it alone. Around 15 per cent of the UK workforce is self-employed, compared with eight per cent in 1980. 

A new FSB report into self-employment describes this trend as a “structural re-shaping of the economy and labour market”, and it is not simply due to redundancies, insists report author David Nash. “In the past three years, self-employment has been increasing at the same time as traditional employment has been increasing,” says Mr Nash. “For many, the benefits of being self-employed include the flexibility it offers, which can mean a better work-life balance, and a chance to fulfil a personal ambition. But there are many challenges, and the Government needs to take these more seriously.”



The challenges uncovered by the FSB research include uncertain and fluctuating earnings, difficulties accessing a mortgage and a lack of income protection insurance. Saving for retirement can also be a challenge, with only 31 per cent of survey respondents saving into a private pension. 

St James’s Place, the wealth management firm, also identifies a “decade-long decline in pension saving among the self-employed”. In 2003-4, around 1.1 million self-employed people were paying into a personal pension; by 2013/14 this had fallen to just 450,000, despite a significant rise in self-employment over that period. 

“Lack of an employer’s pension contribution is one of the most significant disincentives self-employed people face,” says Ian Price, Divisional Director at St James’s Place. “Given the lack of an equivalent to auto-enrolment, the Government could be accused of failing to act to avert a collapse in pension saving for the self-employed.”

This pension challenge stores up problems not only for the individuals themselves but also for the wider economy as self-employment becomes a mainstream career choice. FSB’s report recommends the creation of more flexible savings products for the self-employed, and the use of the annual self-assessment tax return to prompt them to start contributing to a pension scheme. Other FSB recommendations include making income protection insurance more accessible, simplifying the tax system and improving business support for the self-employed. 

In light of these recommendations, First Voice talked to self-employed members about the work they do and the challenges they face.

Darren Andrews, Big 5 Catering 

“I run a catering business that specialises in South African barbecue, hog roasts and lamb spit roasts. Last year we added a South African sauce business.

Previously I was running a pub in Carlisle, and one of my customers asked me if I would do a South African meal for her birthday. I did, and they said ‘you should put this on the pub menu, the food’s really good’. I was then asked to do a wedding. And that got me thinking there could be a business in it. We then moved to Chester, and I hit the ground running with Big 5 (named after the ‘Big 5’ safari animals).

We do a lot of weddings, corporate events and private parties. We also sell bottled Zingy BBQ Sauce, Durban Curry Sauce, Cape Malay Curry Sauce and a Roast Chilli & Garlic Paste in local shops and garden centres.

My accountant advised me to stay as a sole trader until I get to the point of making huge amounts of money. There is no advantage at the moment in being a limited company; it’s a lot more work, and my tax bill is minimal.

The struggle now is that I’m a one-man band, trying to deal with an increase in business. I do have staff that come on a temporary basis – I am based at the University of Chester and attract student workers. But I will probably have to look at taking on some full-time staff. If you have up to five employees, you can run PAYE through the HMRC website. For anything above that, you have to create your own payroll system.



The best cure for work absenteeism is to go self-employed. You just can’t get sick. There’s no way I can ring up a couple and say: ‘I’m sorry, I can’t do your wedding today’.

There should be a better way for self-employed people to contribute to a pension, because it’s the last thing you think about. My wife and I have spent a fortune on childcare, too. Even holidays are a risk – if you turn down work, you don’t get paid.

Easier access to funding would make a difference, as self-employed people are judged on their status. When I first started, I looked at getting a bank loan and I needed three years of accounts, and a crazy deposit. I wouldn’t even bother with a bank now; I would look to crowdfunding or other sources.

Big 5 has been going almost three years now. I’ve got the best boss in the world. I like the challenge. I like the fact that I’ve built a business from scratch, and I like to keep one step ahead of the competition.”

Louise Killick, Barberlou’s

“I’ve been self-employed for 17 years. 

I own and run a barber shop and hairdressers called Barberlou’s, in Battle, Sussex.

Barbers are generally self-employed – when you start out you only really need a car and a pair of scissors, and you rent a chair off the shop owner. I bought Barberlou’s in 2007, and I now employ three people myself by the same system.

I couldn’t afford to pay myself anything to begin with – any money I generated I put back into the business, bought paint for the walls, new chairs, new sink. Staff are the biggest expense, and you have to pay them for holiday pay and so on. You can run at a loss some weeks, but on other weeks earn a lot more, so it all evens out.



If you’re self-employed you don’t really get ill – you take the tablets, and when you go home you try and rest. I don’t have income protection. Sometimes I have not been able to get the admin done in the evenings because I am too exhausted.

But I love the freedom of it. I have only worked once since Christmas, because my staff wanted more days and I can be with my children. Before, I had to work six days a week, and I missed a lot of stuff. I’ve missed weddings, hen dos, funerals. Being pregnant and working as well is exhausting – you’re standing there almost three weeks away from having your baby and you can’t quite reach the chair because your belly is in the way.

My staff and family have been so supportive. That’s why I have a lot of self-employed staff and part-timers now, so we can juggle it and move things around. It’s all going well and I’m happy. I am spending time with the children. That’s what I worked to get. Some people have a business plan – I had a life plan.”

Jude Sach, Sach Virtual Assistance 

“As a virtual assistant, I do primarily administrative tasks for a variety of companies, mostly small businesses. I recently organised an office move. I do a lot of website updates, invoicing, client liaison – even managing small projects.

I don’t come from a PA background – I used to work in IT training. I remember as an employee thinking: I have a skillset that is marketable, I am IT-savvy, and lots of what I do I can do from anywhere. I had a ghastly commute, and it seemed crazy.



When my daughter came along in 2009, I was at home for a while, and people kept asking me to do stuff. Contacts I’d made would get in touch, and work started coming in. So I set myself up as self-employed – and here I am.

I have a network of people I work with. My best friend is a freelance writer and editor. I don’t think either of us chose to do it out of recession or redundancy. It was a lifestyle choice. 

I started as a limited company, but eventually ceased trading to go self-employed because I found that, for the scale of work I was doing, having a limited company was massively onerous in terms of paperwork. 

My husband became ill shortly after my daughter was born, and spent two months in hospital on statutory sick pay. That was tough. I compulsively set aside money for a rainy day, and I think that’s something that everybody who is self-employed has to do. My parents had their own business, so I’ve probably learnt some lessons from them. But I don’t have income protection insurance. I was cynical about payment protection insurance (PPI) on credit cards, for example, and look what happened there. 

There is a lack of clarity for self-employed people as to what help they can get and what insurances they should seriously consider. There’s a strong sense of ‘you’re on your own, Jack’. Occasionally I think it’s better on the other side [as a full-time employee], but then I remember the office politics… 

I would like recognition of the value that self-employed people and micro-businesses add to the economy. There may be hubs in London for co-working, but we need them in rural areas too. I work with so many freelancers and contractors – in a way we are our own local business economy, we all have complementary skills, and if I can’t do it I can find someone else who can. We are greater than the sum of our parts, but unfortunately we get judged on our parts and are supported accordingly.”


Tom Chown, Video production

“I set up my video production company six years ago, having spent 12 years working for broadcasters and production companies including the BBC and Bob Geldof’s Ten Alps. I am the director of my company. I am self-employed, but I employ myself and I employ others, with a full-time apprentice on the books, working in my own studio in Tunbridge Wells.

We produce video and animated content for a variety of clients. In the past few months we’ve delivered projects for the British Army, [brewer] Shepherd Neame and the University of Kent. You tell a story and give people a glimpse into the company. 

I set up as a limited company in 2010 on the advice of a business advice service. On a personal note, it helped me to become more of a businessman. I used to think of myself as a filmmaker first and foremost, but having to think about the marketing, business development and growth strategy just gave it that added gravitas.

I got ill two years ago on a shoot abroad and came back with a water-borne bug. For a couple of months I couldn’t work at all. It took me nine months to get 100 per cent better. I have since taken out an insurance policy, but it’s more for life insurance rather than sickness. 

My experiences with HMRC have been a nightmare. I’m all up for paying my fair share of tax, but I need someone to say what I need to pay, to whom and where I send it. When I started paying an accountant to do it for me, a weight was lifted. A good accountant is key.



Holidays are difficult. Last year I found myself taking a project on a hard drive to France, and editing on a laptop while my family had lovely days out. I haven’t had a pensions contribution from an employer since I worked for the BBC in 2007. I had no paternity cover when my son was born. I was told there was a statutory £130 I could claim, but no one could tell me how I could claim it. 

But, equally, would I have it any other way? Our friends who work full-time in London hardly get to see their kids apart from weekends. I work from home and now both my wife and I work four days a week, to spend more time with our son.

The bonus of being self-employed is being able to say ‘I am doing this’ – I’m in control of my own diary.”

Helping hand

The following sources of support can help entrepreneurs, including services included as part of your FSB membership: 

Gov.uk: gov.uk/working-for-yourself/overview 

HMRC Self-Employed Helpline: hmrctalk.co.uk/self-employed-helpline 
0844 453 0165

FSB Networking: fsb.org.uk/benefits

FSB Independent Financial Services: fsb.org.uk/benefits 

Action on Disability & Work UK:
0844 445 7123
advice@adwuk.org 

Women in Self Employment Resource:
wavewales.co.uk/self-employed

Tim Smedley is a freelance business journalist