Self employment in addition to full time contract

payingitoff2026

Good morning!

I work full time employed for a company on £47,800 PA. This is variable due to sometimes having overtime. My basic pay is generally around £3,200 after tax/pension etc but can go up to £4,000 with overtime. Like I say this varies.

I am about to take on a side hustle on days off. This will earn around £300-500 per day. It will average about 3-6 days per month.I have set up a separate bank account and registered for self employment. I do not necessarily plan on dipping into this although my partner was made redundant so who knows.

My concern is tax. How much of this should I be setting aside for tax? Is there anything I can take from this? Eg. Using this money for my travel expenses- train/petrol/parking? Many thanks!

Dazed_and_C0nfused

Where are you resident for tax purposes? Scotland or elsewhere in the UK?

I would be keeping 40% for tax but you might want to read up on payments on account (can be a shock to some people).

And you might find this useful

https://www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/business-expenses-allowable-tax

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6656983/self-employment-in-addition-to-full-time-contract

If you have a full time job paying £50k per year, how much time do you have to support the side-hustle without suffering burnout or impacting performance in the day job?

Taking the middle of your numbers, £400 for 4.5 days per month so £1.8k per month is another £21k per year. As a sole-trader, income tax will be 40% (assume not Scotland). Extra money for sacrificing your evenings / weekends £12k.

Have you considered operating as Ltd Co? It will give more flexibility as to when funds are drawn and may allow for more tax efficient outcomes.

Pension contributions would also be a tax efficiency consideration (subject to the applicable limits).

Does your current employment permit you to also take on the side-hustle?

payingitoff2026

https://forums.moneysavingexpert.com/discussion/comment/81899981#Comment_81899981

thank you, I am in the UK

payingitoff2026

https://forums.moneysavingexpert.com/discussion/comment/81900150#Comment_81900150

Yes my current employers are aware.

I work 4 days per week with my contract employment and pick up work around that.

The side hustle is less stressful as I turn up, do the work and go home. It can be a few hours or up to 6 hours. I do not need to get involved with the politics and stress of it like I would my normal job.

I did actually set up a LTD company and business bank account but spoke to an accountant who suggested that self employment may be better. I was thinking to strike off the LTD (no money has gone into it yet) and move to self employment. Maybe I need to speak with another accountant?

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81900258#Comment_81900258

Scotland has different income tax to the rest of the UK so "in the uk" isnt specific enough.

As a sole trader there is only you and no corporate entity, as such it makes no difference at all if you dont touch any of your self employment money or spend every penny of it you will be paying income tax on it all either way.

You know your annual wage and current annual tax bill. Add to that your self employed profit and put it through a take home pay calculator which will tell you the total tax and then take off the salaried tax bill and that will be approximately your self employed tax bill.

Note that if you will be paying more than £1,000 in self employed taxes then you will have to make payments on account so when you do your first tax return you will have to pay for the 12 months covered by the return plus an additional 6 months at the same rate. Then in the July you will have to pay another 6 months but then on your second tax return it will be a true up on your payments on account plus a future 6 months.

In principle it shouldn't be a problem because you have much more than 6 months after the end of the financial year to pay your taxes but some people dont budget well and then get into a mess being effectively asked for 18 months of tax on the first return.

You can ask for payments on account to be reduced but you will be charged penalty interest if you reduce them and it turns out they should have been higher than the number you reduced it to.

uknick

Regarding your side hustle, will that be for 1 customer only? If so, you need to look at the rules for IR35. It could be you fall inside them which is why the accountant suggested doing it as a sole trader.