Self employment

 As a Franchisee you are in fact normally a Self Employed person. The alternative to franchising is to run your own small independent driving school. This is not as daunting as you may think. After all, have you not just passed one of the most stringent driving tests in the world? Being entered on the D.S.A.s Register is no small achievement and if you can do that, then you have the ability to run your own driving school. If you decide to follow this route there are a few things you need to consider.

1.        There are many advantages of being a self employed driving instructor and these are set out elsewhere in DRIVERS WORLD under the heading ‘Benefits of Being a Driving Instructor’. However these advantages have to be considered and balanced against the extra work and requirements involved in administering your self employed status.

2.        You must by law advise the Inland Revenue that you have now become ‘Self Employed’. You will eventually have to submit tax returns and you will not want the nasty shock of having to pay accumulated back taxes because you did not notify them from the beginning. The amount of tax you actually pay will depend upon your personal circumstances, but it would be wise to set aside as you go a sum of approximately £2.00 per pupil lesson. This should go a long way towards covering your normal tax liability.

3.        You must also pay the appropriate rate of National Insurance. This again is a legal requirement which if not done may affect your entitlement to all sorts of statutory benefits, not to mention a state pension when you reach retirement age. The current rate works out at about 7 pence per lesson based on a 30 hour week. It’s not worth getting into trouble over.

4.        It is advisable to employ the services of an accountant who will, for a minimal fee, administer your tax and national insurance affairs and do the necessary returns. It is simply not worth the hassle of doing them yourself. A good accountant will save you more in tax than his fee will cost. Fees vary, but if you allow about 10-12 pence per lesson based on a 30 hour week, that should cover them.

5.        If you want a comfortable retirement it is almost essential that you invest in a Pension Fund. There is no guarantee that the State Pension will be sufficient to keep you in the manner to which you will have become accustomed in your career as a driving instructor. No matter what age you are now you will find there are suitable policies to meet your expectations in the DRIVERS WORLD Directory. Why risk being poor in retirement when for the sake of as little as 75 pence per lesson you can look forward with confidence.

6.        As a self employed person you have to consider the possibility of not being able to work due to ill health and thereby losing your source of income while you are recovering. For peace of mind, it would be advisable to contribute to a ‘loss of income’ insurance policy. These are available at minimal cost and should work out at no more than 10 pence per pupil hour depending on your declared income expectations.

7.        With health still in mind you should also consider the possibility of taking out a ‘Private Health Plan’ with the likes of BUPA. Not being able to work for a few weeks while you recover from, say a broken arm, is one thing, but being incapacitated for months while you wait for an NHS operation is something else again. A Private Health Plan will allow you to get more or less immediate treatment, thus enabling you to get back to work without undue delay. Between 25 and 50 pence per pupil lesson should cover contributions depending upon what level of cover you want.

 

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