Would self-employment work for you?

Almost 75% of AAT licensed accountants are purely self-employed and typically earn about £49,500 a year. 

However, there are things to consider before you hand in your notice and start out on your own – everything from checking you’re licensed to work, to ensuring you have a good work/life balance.

Can you go it alone?

AAT supports more than 4,000 licensed accountants and bookkeepers who are self-employed. All AAT members offering bookkeeping or accountancy services must hold a valid licence. Without this, you cannot call yourself an AAT Licensed Accountant or Bookkeeper.

The services you can provide as a self-employed bookkeeper or accountant will depend on the AAT licence you hold. To be licensed, there’s a procedure to go through for which you’ll need to pass professional ethics and anti-money laundering tests and provide a professional reference.

You will have to arrange professional indemnity insurance and continuity of practice cover (so your clients can be serviced if you are incapacitated) – this latter is mandatory if you’ve seven or more clients.

These are the professional essentials.

There are practical ones too: if you’re going to work from home you’ll need all the necessary computing hard and software as well as plenty of secure storage for client records; good broadband speed (and easy access to an IT expert in case of problems) and lots of stationery.

You’ll also need to get used to a lack of certainty in your income: it’s a good idea to have some savings behind you particularly when you’re starting out on your new journey.

I definitely think that accountancy is a perfect profession for self-employment.

Not your stereotypical accountant…

For Paul Smith FMAAT, who has been a self-employed AAT licensed accountant since 1999, the quality of life he has now would be impossible were he to be an employee. Paul splits his time between Florida and Halifax and travels widely. “If I wasn’t self-employed, I couldn’t travel and have the lifestyle I have” says Paul. Technology means he can work from anywhere in the world.

Many of Paul’s clients have been with him for years and they have introduced him to others. “I did pay for advertising once” says Paul. “It was a waste of time and money. I’ve got all my clients through word of mouth”.  Lots have come to him through two divergent routes. “When I started out as self-employed I was into the local music scene – all the rock people came to me to do their accounts. And I’m also an officer in the Boys’ Brigade. These connections and others have brought me many clients.” Paul adds that when he started out, he accepted even small jobs that didn’t seem that attractive. But these often led to bigger jobs and new clients – so were worth it.

But how does he motivate himself to work? “When I first went self-employed, I’d just bought a house” says Paul. “Wanting to get rid of the mortgage was motivation enough for me”. He adds: “The only possible negative I can think of about self-employment is that you are switched on all the time. Now that I have my sister working for me, that’s less of a concern – and I do have proper breaks from work. I definitely think that accountancy is a perfect profession for self-employment. Actually I think I am unemployable now: I do what I want and when I want – who could ask more than that?

Would it suit you? 

If you’re used to being an employee, then becoming self-employed will require a sea-change in your attitude.

You’ll no longer be paid when you take time off, and you’ll have to arrange your own pension out (you will no longer receive contributions from an employer); if you are ill, you won’t get sick pay and there will be no more work related benefits, such as subsidised health insurance. On a social level, you might miss out on working with others.

You’ll also need to think how you’re going to get clients: are you going to advertise or rely on networking? Think about marketing: what differentiates you from other practices? Where do you see your business going – do you want to work on your own or would you like to have employees in the future? How will you motivate yourself if things get difficult or work is scarce?

On the upside, there will be no boss to answer to. You will be able to determine how your business progresses. And you can work when and how you wish. No more commuting or working nine ‘til five could look very attractive if you feel like a cog in someone else’s machine at the moment.

Now I’m the boss

Samantha White, FMAAT of My Credit Controllers Ltd went self-employed five years ago after being employed as a financial controller. “I spotted a gap in the market – to work as a freelance credit controller for clients” she says. She started out working from her bedroom. Now she has an office, four employees and a client base ranging from one-person businesses to those with turnovers in excess of £25m.

Getting a good work-life balance can be difficult now she’s self-employed, says Samantha. “You don’t really get downtime, and I find it really hard to switch off. I tend to be the first in and last to leave the office too and until I took on employees, I didn’t really take holidays”. She adds: “It’s important to be aware that when you first go self-employed, it can be lonely – depending on your line of work you might not see people for days on end. And then, when you take on employees you have to get up to date with all the regulations covering staffing – such as auto enrolment.

“But I think accountancy and bookkeeping is a professional well suited to self-employment: I have never regretted making the move. It’s a great reward to see your business growing the way you want it to and to help develop staff in their careers”.

Our AAT membership page is full of useful information about how to become a professional member. As well information about membership progression, from Affiliate to MAAT and MAAT to FMAAT. 

Charlotte Beugge spent more than 20 years as the deputy personal finance editor on The Daily Telegraph and then The Daily Mail. A freelancer since 2010, her work has appeared in national newspapers, magazines and websites.