Budget 2021: What It Means for Self-Employed Electricians and Career Changers 

In March 2021, the Chancellor, Rishi Sunak, delivered a Budget that many in the trades were watching closely. With so many electricians and allied trades working as self-employed sole traders, the question on everyone’s mind was simple: how will government decisions affect those running their own businesses or planning to take the leap into self-employment? 

For those considering a career as an electrician, or for existing sparks already working for themselves, the a nnouncements gave some much-needed clarity. In this article, we’ll explore the key changes that affect the self-employed, the opportunities for those entering the electrical industry, and how structured training pathways can help you build a secure career. 

Support for the Self-Employed 

One of the headline measures was the extension of the Coronavirus Self-Employment Income Support Scheme. For many tradespeople who saw work dry up during lockdowns, this was a vital lifeline. Around 600,000 newly self-employed individuals — including those who started working for themselves in the 2019/20 tax year — were made eligible for grant payments. These payments were designed to cover lost income in June, July, and August 2021. 

Alongside this, the government continued its furlough scheme for employed staff, offering reassurance for small businesses that rely on both PAYE employees and subcontractors. 

Taxation and Allowances 

While speculation had suggested that higher taxes could be on the horizon, the 2021 Budget took a different approach. There were no immediate increases to income tax, national insurance, or VAT. 

Instead, the Chancellor announced a freeze on thresholds: 

• The personal allowance set at £12,570 from 2022 to 2026. 

• The higher-rate threshold frozen at £50,270 over the same period. 

For self-employed electricians, this meant stability in the short term, but also the reality of f iscal drag: as wages rise over time, more workers may be pulled into higher tax brackets. Understanding this impact is vital for anyone thinking about running their own electrical business. 

Why Electricians Are Turning to Self-Employment 

The electrical trade has always attracted a strong proportion of self-employed workers. Many electricians value the flexibility, independence, and potential for higher earnings that come with working for themselves. The post-pandemic world has reinforced this, with growing demand for electrical work across domestic, commercial, and renewable sectors. 

As more homeowners and businesses adopt renewable technologies, the opportunities for qualified electricians are e xpanding rapidly. Specialisms such as inspection and testing, EV charging point installation, and solar PV are increasingly sought after. 

Courses like the 2391 City and Guilds qualification in inspection and testing are a valuable way for electricians to upskill and secure more lucrative contracts as self-employed professionals. 

Building Your Pathway Into the Trade 

For career changers, the idea of becoming self-employed can feel daunting. But the route into the trade is structured and achievable. Many learners begin with the Level 2 Diploma, before progressing to the level 3 electrical installation. This pathway leads towards the NVQ Level 3, AM2, and ultimately Gold Card status, the benchmark for fully qualified electricians in the UK. 

Regional training hubs provide accessible options across the country, including Electrician Courses Redditch and Electrician Courses Castle Bromwich. Having local centres makes it easier for learners to balance study with work and family commitments while building the qualifications needed for long-term success. 

Why Budget Announcements Matter for Trades 

Government Budgets don’t just set out tax and spending plans; they also shape the environment in which tradespeople operate. The 2021 Budget reassured the self-employed with continued support and no immediate tax rises, but it also underscored the importance of planning ahead. 

For electricians, staying on top of these changes matters for several reasons: 

• Cashflow – Grants and schemes can provide vital breathing space when work slows. 

• Tax planning – Understanding frozen thresholds helps sole traders budget for the future. 

• Business growth – Knowing the wider economic picture can guide decisions on when to expand, hire staff, or invest in further training. 

Becoming a Self-Employed Electrician 

If you’re thinking about entering the trade and eventually working for yourself, here are some practical steps: 

• Complete your training – Follow the structured pathway from Level 2 through to NVQ and AM2. 

• Gain real-world experience – On-site practice is essential for building confidence and competence. 

• Consider specialist courses – Upskilling in areas like EV charging or inspection and testing can open higher-value work. 

• Register as self-employed – Once qualified, you can notify HMRC and begin trading as a sole trader. 

• Plan your finances – Understanding tax obligations and available allowances will help you run your business smoothly. 

The Bigger Picture 

While the 2021 Budget focused on short-term support measures, the long-term outlook for electricians remains strong. The UK is committed to major infrastructure upgrades, including net-zero targets, renewable energy systems, and the electrification of transport and heating. 

For anyone entering the trade, this means not only stability but also growth. By combining core qualifications with specialist training, electricians can build resilient, future-proof careers that thrive under both government policy and market demand. 

If you are considering a new career in the electrical industry, structured training is the best way to start. Elec Training offers a clear pathway from beginner to fully qualified electrician, with opportunities to upskill through courses such as inspection and testing, EV charging, and design. 

To learn more about training opportunities, visit https://elec.training/ or speak to a course adviser about the route that fits your goals. 

FAQs on the 2021 UK Budget, Self-Employed Electricians, and Career Opportunities 

1 – What support did the 2021 Budget provide for self-employed electricians during the pandemic?

The 2021 UK Budget extended the Self-Employment Income Support Scheme (SEISS) to provide further financial relief for self-employed individuals, including electricians, impacted by COVID-19. This included a fourth grant covering 80% of three months’ average trading profits (capped at £7,500) for the period February to April 2021, and a fifth grant for May to September 2021, adjusted based on turnover impact (80% for 30%+ drop, 30% for lesser impacts, capped at £7,500 and £2,850 respectively). The scheme was broadened to include those who filed 2019/20 tax returns, adding 600,000 newly eligible self-employed workers. Additionally, the Budget maintained no increases in income tax, national insurance, or VAT rates, while extending reduced VAT for hospitality (benefiting some electricians in related sectors). 

2 – Who became newly eligible for the Self-Employment Income Support Scheme in 2021?

In the 2021 Budget, eligibility for SEISS was expanded to include an additional 600,000 self-employed individuals who became newly eligible, primarily those who started trading in the 2019/20 tax year and filed their tax returns by 2 March 2021. This group, previously excluded due to lack of prior trading history, could now claim grants based on 2019/20 profits, provided they met other criteria like trading profits under £50,000 and at least 50% of income from self-employment. The change aimed to support those who started businesses just before the pandemic. 

3 – Were there any changes to income tax, national insurance, or VAT in the 2021 Budget?

The 2021 Budget did not raise rates of income tax, national insurance (NI), or VAT, honoring manifesto pledges. However, it froze the personal allowance at £12,570 and the higher-rate threshold at £50,270 from April 2022 to 2026, leading to fiscal drag. VAT for hospitality was extended at 5% until September 2021, then 12.5% until March 2022. NI thresholds increased to £9,880, but no rate changes occurred. 

4 – What does the freeze on personal allowance and higher-rate thresholds mean for electricians?

The freeze on the personal allowance (£12,570) and higher-rate threshold (£50,270) from 2022 to 2026 means more electricians will pay higher taxes as wages rise with inflation, pushing them into tax bands without rate adjustments. For an electrician earning £33,000 in 2021/22 (paying £4,086 tax), fiscal drag could increase their tax to £4,806 by 2025/26, adding £720 annually. This affects take-home pay, particularly for self-employed with variable incomes. 

5 – How does “fiscal drag” affect self-employed electricians as wages rise?

Fiscal drag occurs when frozen tax thresholds pull more income into higher bands as wages rise with inflation, increasing the tax burden without rate changes. For self-employed electricians, rising earnings (e.g., from £33,000 to £40,000) could drag them into the 40% tax band, increasing effective rates from 11.6% to 13.6% and adding £720+ in tax annually by 2025/26. This erodes profits, especially with variable income, but can be mitigated through deductions and allowances. 

6 – Why do many electricians choose self-employment instead of permanent roles?

Many electricians choose self-employment for greater flexibility in hours and projects, potential for higher earnings (£50,000+ vs. £33,000–£38,000 employed), independence in decision-making, tax advantages (e.g., deductions for tools/vehicles), and the ability to specialize in high-demand areas like EV installations. It offers autonomy but requires handling admin, taxes, and variable income. 

7 – What training routes are available for career changers wanting to become self-employed electricians?

Career changers can pursue: fast-track diplomas (C&G 2365 Level 2/3, 1–2 years, £3,000–£7,000), followed by NVQ Level 3 via placements and AM2; apprenticeships (3–4 years, paid but slower); Experienced Worker Assessment (EWA, 6–12 months for 3–5 years’ related experience); or Skills Bootcamps (4–16 weeks, free for 19+). These lead to self-employment via CPS registration (NICEIC/NAPIT). 

8 – Which specialist qualifications (e.g., inspection and testing, EV charging) increase earning potential for sole traders?

Specialist qualifications boosting earning potential for sole traders include: EV Charging (C&G 2921-34, 2–3 days, 20–30% premium via OZEV grants); Inspection & Testing (C&G 2391-52, 5–7 days, £5,000–£10,000 extra for EICRs); Solar PV (C&G 2399, 3–5 days, for renewables); PAT Testing (C&G 2377-77, 2 days); and 18th Edition (C&G 2382-22, 3–5 days). These enable higher-rate jobs (£200–£400/day) in net-zero sectors. 

9 – How can electricians plan financially for self-employment after the Budget changes?

Post-2021 Budget, electricians can plan by: budgeting for fiscal drag (e.g., £720+ extra tax from threshold freezes); setting aside 20–30% for taxes/NI; using deductions (tools, van, home office); tracking expenses via apps; saving for emergencies (3–6 months’ income); contributing to pensions (e.g., SIPPs for tax relief); and diversifying income (e.g., EV installs). Seek accountant advice for IR35 and VAT. 

10 – What long-term opportunities exist for electricians given the UK’s Net Zero and infrastructure commitments?

Long-term opportunities include 160,000+ jobs by 2030 in renewables (solar PV, battery storage, heat pumps) and EV infrastructure (300,000 chargers), driven by Net Zero 2050 and Clean Power 2030.