Best way to do some work "on the side"

peterarnold_2 · 14 October 2015 at 9:17PM

Hi,

I am in full time employment and a 40% rate tax payer but I plan on doing a spot of work on the side in my evenings. I've previously done tax returns for a similar thing a few years back but stopped that when things dried up.

What's the best way of doing this? The thought of 40% of what I charge going straight to the tax man bugs me. I'm not looking to tax dodge, just wondering if there is a better way to approach this than registering as a sole trader again. Is it worth setting up as a limited company? The amounts are small to begin with, maybe a few hundred pounds a month.

My clients are also smaller businesses but they need invoices and receipts etc so some sly cash in hand isn't an option either.

Thanks.

(Sorry if this is the wrong forum, but "boost your income" seemed the most appropriate).

Owain_Moneysaver · 14 October 2015 at 9:47PM

Remember that as a self-employed person you can deduct permitted expenses from your gross income before calculating your taxable income.

Maktina · 15 October 2015 at 12:14AM

If you're in a 40% tax bracket, then it's definitely worth setting up a company and working as a contractor. My dad started his company over 30 years ago and has been paying himself since then. Ofcourse, a company has a LOT of paperwork and you'll need to be prepared to handle PAYE stuff.