Back
Let us sort your Self Assessment today. Stress-free. For £119, all in. Learn more

Can I be both employed and self-employed?

Being both full-time employed and self-employed is actually quite common, so the short answer is yes.

Let’s look at some situations.

A. Being full-time employed and self-employed on the side

For example: Rebecca works as a full-time developer for TaxScouts but she also writes software for her own clients via PeoplePerHour — she needs to register as self-employed and pay tax on this income.

What you need to do:

  1. check if you need to register
  2. register as a sole trader with the HMRC
  3. make sure your tax code is correct
  4. submit a personal tax return each year for your self-employment income.

How much tax will you pay?

Tax Who pays
Income tax for salary Your employer
Income tax for self-employment profits (minus claimable expenses) You
Class 1 National Insurance contributions Your employer
Class 2 and 4 National Insurance contributions You

B. Working through an umbrella company

An umbrella company is a business that acts as an employer to freelancers:

  • Your client pays it for your work
  • The umbrella company pays you a salary and takes care of taxes via PAYE.

What you need to do:

  • check with your umbrella company — they should pay taxes for you.

C. Not being sure if you’re an employee or subcontractor

What you need to do to figure out if you’re an employee:

D. Doing business through your own limited company

In this case you’re actually both an owner (“shareholder”) and employee of your own company (“director”), but not self-employed.

What you need to do:

  • submit a company tax return each year
  • the company will pay tax on its profits first (minus costs, including salaries)
  • either pay yourself a salary (and pay taxes through PAYE) or an annual dividend (and pay dividend tax), or both
  • submit a personal tax return as well if your dividends are over £10,000.

Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.

Have a minute? See how it works

More guides & useful information

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.