Rules around occasional paid work?

HoplessCase

Hi there,

I'm currently in full time employment but a contact has offered me occasional work that I could do in my free time and will probably bring in an extra £100-200 a month.

It's obviously a great opportunity that I'm keen to at least give a try but my question is how do I check what my legal responsibilities are, e.g. paying tax on the money?

I'm not quite sure what I'm looking for... Is it possible to be permanently employed and self employed at the same time? Sorry if that's a stupid question, it's just most the info I've found seems to be focused on people starting their own business full time.

Thanks in advance for any help

bamgbost

I believe you can do both! So long as the 2ndary employment is not a rival to your primary job. And does not interfere with your daily performance. e.g. finish @ 6 am, and turn up to work at 9am with minimal sleep, etc. But you have to check your company handbook, on whether to inform hr or not.

Not quite sure on the tax implications. sorry

PlutoinCapricorn

Many people are employees on PAYE and self-employed at the same time.

If you expect to get more than one assignment, it is best to register as a sole trader. Would this extra money put you into the higher rate tax band?

wishus

If it's not on PAYE, then you will need to keep back tax to pay on the 2nd source of income.

I try to make this easier for myself by getting all my non-PAYE work paid into a separate account to my main salary, and only using that account to pay for tax-deductible expenses for the work. Then you need to remember to keep at least 20% back for the taxman, more if extra earnings take you into a higher band.

You can chat to HMRC about it and they are usually very helpful.

comeandgo

Will you be an employee or is the work self employment. Hmrc have information on their pages regarding the definition of self employment. If you are employee then employer will get tax code and deal with your tax. If self employed you have to contact a Hmrc and tell them. You then need to complete self assessment every year detailing the money you were paid less any allowable expenses.
If you are self employed check if you need any liability insurance.

Savvy_Sue

You should check whether your PAYE employer requires you to notify them / ask permission before taking on other work.

jobbingmusician

Also have a look at the mystery shopping sticky at the top of the boost your income board - lots of advice in the first post about starting self-employment, with advice about what to do when you have another job as well.

HoplessCase

Thanks everyone! Some god points. It won't put me into a different tax bracket but I will look into setting up as a sole trader and speak to my boss to ensure no issues from them. It should only be an hour a week in the form of a meeting so hopefully shouldn't impact sleep or ability to existing job - just a cheeky extra hour of work a week for some extra cash! :T

PlutoinCapricorn

The possible problem areas are being too tired to concentrate on your main job, conflict of interest by working for a competitor and doing things connected with the extra work in your main employer's time - or using their resources such as printers.

If all that is ok then you are all set. One point about being a sole trader is that if you work regularly for the same amounts month after month for just one client who sets all the rules, HMRC might consider you as a de facto employee and expect the client to treat you as such.