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There has never been a better time to become self-employed. The Internet has made it incredibly easy both to find work and start a business online.

The barriers to entry are remarkably low. You don't need special premises, employees or expensive equipment. In most cases a computer or laptop, telephone line, an Internet service and optionally a website are all that is required to earn a living online.

There are two main paths into self-employment online. The first involves acting as a freelancer and finding employment such as data entry, article writing, transcription (including medical transcription, which can be very highly paid) - basically any paid task that can be completed at home in your own time. For a comprehensive service geared towards finding freelance work, click here.

The second involves selling or advertising products and services to other people. Thousands of people earn a substantial living selling through eBay, either by trading from wholesale suppliers or by selling information (after all, information is money these days). One can also join various affiliate programmes and promote products and services on behalf of other companies in return for a commission. This is the route I have taken, and it has proved surprisingly lucrative. To find out more, click here.

Once you've decided to become self-employed, there are a number of rules and regulation you must follow - the number one being payment of tax. As a self-employed worker you must pay your own tax instead of having it taken automatically from your wages. You must also pay National Insurance contributions, usually a flat rate of a couple of pounds a week. The Government provides a comprehensive website called BusinessLink.gov.uk with help and support for newly self-employed people.

Scams and Pitfalls

Unfortunately the Internet makes it easy to perpetrate scams against unwitting customers. A lot of 'work at home' opportunities are simply a way to get you to pay someone else money for the privilege. As a general rule, you shouldn't have to pay money in advance in order to receive work (although there are exceptions, including GoFreelance, which charge a small fee to act as a trusted mediator between companies offering work and individual freelancers).

If you come across a website or company offering work from home opportunities and you're unsure of its reliability, type the name or phone number of the company into Google and examine the results to see if anyone has complained about them. Performing a quick Google search with appropriate keywords will often produce a wealth of information about a company's operations that they wish to keep quiet.

One particular scam to avoid is being asked to receive cheques on behalf of a mail order company, usually based off-shore (ostensibly for tax purposes). You deposit the cheque and forward the money (less your 'administration fee') to the company, whereupon they deliver the goods to their customers. There are two variations to this scam; in the first, the company never delivers a product to their customers, but since you received the cheque the customer blames you. In the second, the cheque itself is fraudulent, and by the time your bank realises, it's too late and your forwarded money is gone.

In general, the rule is to use your common sense when looking for online work. If you feel suspicious about an opportunity, investigate what other people have said about it. Often you'll not be the first to find out. There are a lot of genuine opportunities out there, but the scams always make the headlines.