Becoming self employed whilst working full time

kdb_2

Hi all, I'm considering stating up a business offering IT support to homes and small businesses at evenings and weekends. Just a few questions if anyone can help...

1. I wish to keep quite about this venture to my employer. How do I ensure that Tax and NI is kept separate from my PAYE job?

2. As the business will be a low earner at the beginning, I'd be happy to make £100 a month at first, would it be feasable to use a joint account that I have that is not used for anything else? At the moment I personally don't think that a business account would be required.

3. We currently receive Child Tax Credit, how would I declare any earnings from the self employed job? They obviously have all my work details for my PAYE job. Is it just as simple as filling in the 'any other income' box on the annual review form? I can't exactly give them a figure as an estimate as I just don't know what this will take off like just yet.

4. In regards to tax, say if the 1st year is poor year and I only make £200 for example. Would I just file a self assessment form at the end of the year and pay tax on this £200 as well as the class 2 NI throughout the year?

Thanks in advance for your help.

stebiz

kdb wrote: »

Hi all, I'm considering stating up a business offering IT support to homes and small businesses at evenings and weekends. Just a few questions if anyone can help...

1. I wish to keep quite about this venture to my employer. How do I ensure that Tax and NI is kept separate from my PAYE job?

2. As the business will be a low earner at the beginning, I'd be happy to make £100 a month at first, would it be feasable to use a joint account that I have that is not used for anything else? At the moment I personally don't think that a business account would be required.

3. We currently receive Child Tax Credit, how would I declare any earnings from the self employed job? They obviously have all my work details for my PAYE job. Is it just as simple as filling in the 'any other income' box on the annual review form? I can't exactly give them a figure as an estimate as I just don't know what this will take off like just yet.

4. In regards to tax, say if the 1st year is poor year and I only make £200 for example. Would I just file a self assessment form at the end of the year and pay tax on this £200 as well as the class 2 NI throughout the year?

Thanks in advance for your help.

1. I wish to keep quite about this venture to my employer. How do I ensure that Tax and NI is kept separate from my PAYE job?

If you declare yourself as self employed this should have no effect on your tax code, so your employer would not know.

2. As the business will be a low earner at the beginning, I'd be happy to make £100 a month at first, would it be feasable to use a joint account that I have that is not used for anything else? At the moment I personally don't think that a business account would be required.

The bank would be none the wiser. Just a bit of advice. If you do start XXXX Computing - make sure you don't get cheques made payable to them. It's happened to me.

3. We currently receive Child Tax Credit, how would I declare any earnings from the self employed job? They obviously have all my work details for my PAYE job. Is it just as simple as filling in the 'any other income' box on the annual review form? I can't exactly give them a figure as an estimate as I just don't know what this will take off like just yet.

You could advise them that you are going to try and earn money from Self Employment so they make a note. But like you say until you get the first quarter out of the way you have no idea what to enter.

4. In regards to tax, say if the 1st year is poor year and I only make £200 for example. Would I just file a self assessment form at the end of the year and pay tax on this £200 as well as the class 2 NI throughout the year?

Yes that is correct. And don't forget now you are self employed, you can claim a percentage for Computers, Phone, etc etc

Good Luck

Stebiz

greenspark

Hi - another newbie here. Just wrote a long reply but something weird happened about not being logged in (even though I was) and it ate my reply, grrr!

Anyway, the gist of it was to recommend going to one of the HMRC free workshops on staring a business, and that HMRC also have a helpline for the newly self employed. I'm in a similar position to you - thinking about self employment alongside a job - and found the workshop made it a lot less complex than I thought it'd be, and they'd be able to answer the questions you have. There's details on the HMRC website.

Good luck with it!

kdb_2

Thanks folks,

My biggest worry is about my employer really. Last thing I want is for my employer to find out and take the hump. It will be a similar line of work allbeit on a much smaller scale to homes and small businesses. My employer deals with larger multi site companies.

My other worry was about the child tax credit and all that. Basically, I know I will be starting small (very small) and I would like to keep everything with work/child tax credit pretty much the same. I won't mind taking a drop in the child tax credit if my business picks up.

To be honest I am quite excited about the whole thing. It's something I do anyway as a job and have done for quite a few years now, but this time it will be my own. Who knows, maybe one day it will provide a decent second income or more.

lozza1985

kdb wrote: »

Thanks folks,

My biggest worry is about my employer really. Last thing I want is for my employer to find out and take the hump. It will be a similar line of work allbeit on a much smaller scale to homes and small businesses. My employer deals with larger multi site companies.

My other worry was about the child tax credit and all that. Basically, I know I will be starting small (very small) and I would like to keep everything with work/child tax credit pretty much the same. I won't mind taking a drop in the child tax credit if my business picks up.

To be honest I am quite excited about the whole thing. It's something I do anyway as a job and have done for quite a few years now, but this time it will be my own. Who knows, maybe one day it will provide a decent second income or more.

With you planning on doing something similar to your current employer (albiet on a smaller scale) you should double check your contract just case there is anything in there restricting you from setting up your own business that could be conveyed as being competing - from you say it would be similar, but targeting a different audience, but best to make sure, as you don't want your employer to use it as an excuse to get rid of you at a later date.

kdb_2

Yeah that was on my list, just dug out my contract and it does indeed state that I can't become involved in any other business or trade. Looks like the idea is dead in the water before I start.

kdb_2

Actually, I didn't realize that an employer could stop you from having a second job, even if it was unrelated and had no impact on your full time job.

lozza1985

kdb wrote: »

Actually, I didn't realize that an employer could stop you from having a second job, even if it was unrelated and had no impact on your full time job.

Usually if it is completely unrelated (like me for instance, I work in a lab and do avon - obviously not in competition with my employers lol!) then you are fine, but if it is similar in anyway, then they can put clauses in your contract restricting you from setting up your own business within a certain time frame, within a certain distance etc etc depending upon what they decide they want in your contract, and even after you have finished working for a company you can be restricted upon setting up your own business - though that is only usually seen in CEO type positions.

BerryDelight

You will have to check your contract as Im afraid, often states you must notify them, you could be a bit creative with what you second job will be doing but in most cases if you dont inform them and they do find out it can be a straight dismissal.
I mystery shop in the evenings and weekends and had a duty under my contract to inform my employer.
Good luck with the venture!