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Being both full-time employed and self-employed is actually quite common, so the short answer is yes.
Let’s look at some situations.
You can have a full-time job but also work on the side as a freelancer.
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 declare her untaxed income.
While Rebecca is paid her salary through PAYE thanks to her employer, the income she makes on the side is untaxed income and needs to be declared to HMRC so they can let her know how much tax she owes.
Her next steps:
|Income tax for salary
|Income tax for self-employment profits (minus claimable expenses)
|Class 1 National Insurance contributions
|Class 2 and 4 National Insurance contributions
🚨From 6 April 2024 (the 24/25 tax year onwards), Class 2 National Insurance is being scrapped. If you’re under the threshold and pay them voluntarily to qualify for benefits, you’ll still be able to do so.
At the same time, Class 4 is reducing from 9% to 8%.
An umbrella company is a business that acts as an employer to freelancers. Instead of you getting paid directly, your umbrella company pays your salary via PAYE.
How would it work, you ask?
Check with your umbrella company on how the process works. They should be paying taxes from your salary to HMRC on your behalf, like any other employer would.
Sometimes, it’s not easy to know whether you’re an employee or a subcontractor. However, it usually is stated in the contract when you start working.
If you’re still unsure, you can figure out if you’re an employee by:
Remember, if you’re not an employee that means you’ll have untaxed income you’ll need to declare to HMRC, through a Self Assessment tax return.
In this case you’re actually both an owner (shareholder) and employee of your own company (director). Therefore, you wouldn’t be considered self-employed.
You’ll need to:
Still not sure what your situation is? If you’re trying to get your taxes sorted and need a hand figuring out your next step, don’t hesitate to get in touch! Our friendly support team is happy to help. You can reach them on [email protected] or via the live chat on the homepage.
Don’t panic. We can help. We offer one-off, personal tax advice from an accredited accountant for just £119. Book a phone or video call to get your head around your tax situation, what it means, and what to do next. Learn more here.
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