PAYE and self-employed

[mickk]

Is it common to be both and do employers take a dim view of this practice?

Reason I ask is I have been approached by a company to carry out work for them but do not want to leave my current employer. Not sure my boss would like the sound of it though.

[Siscar]

Some employment contracts prevent it, that would be a first thing to check.

Whether they should object depends on whether you are essentially competing with them and also how much of it you'll do, whether it will impact on your work.

[mickk]

Most of the work would involve weekends and out of my normal working hours, it is the same type of work but would I have to tell my employer?

Haven't checked my contract, that's a good point.

Would my employer be able to find out though as in through my tax code or is treated separately?

[Siscar]

As to telling them, it all depends on the contract/T&Cs. Personally I would take a view that if you think it would upset your employer then it might not be a good idea.

As for the accounting side I don't think they would know but no doubt Eric Mc or similar will be along shortly on that side of things.

[Eric Mc]

There are no legal reasons why an individual can have income taxed under PAYE and a separate stream of income taxed as self employed income.

Obviously, once a person sets up a self employed activity, they need to notify HMRC of their need to complete and submit Self Assessment tax returns.

[mickk]

So it would be impossible to hide that info from my current employer?

[condor]

You could just casually mention it to your line manager and ask them if it might be a problem or not. They'll either say yes or no, perhaps ask for you to put it in writing for consent to be given from their line manager ...or something else.

[mickk]

Thanks for the replies guys, things to think about.

[Siscar]

I think Eric is saying that you can have income under PAYE and then some self employed income on top. The PAYE would be as now that the employer wouldn't know what you are also declaring further income to HMRC directly. I'm paid by both salary and dividend and our payroll people don't know anything about the dividend and other income.

[Mr Pointy]

Eric Mc said:

There are no legal reasons why an individual can have income taxed under PAYE and a separate stream of income taxed as self employed income.

Did you mean can or cannot?

[Eric Mc]

Mr Pointy said:

Eric Mc said:

There are no legal reasons why an individual can have income taxed under PAYE and a separate stream of income taxed as self employed income.

Did you mean can or cannot?

Cannot - sorry. Was in a rush.

[Eric Mc]

mickk said:

So it would be impossible to hide that info from my current employer?

Why do you say that?

[Countdown]

mickk said:

So it would be impossible to hide that info from my current employer?

Not impossible at all. I know lots of people who do "foreigners". In some cases it has no impact on their day to day work, in other cases they are literally taking away business from their employer and doing it themselves. In one scenario a friend of a friend was using his Employer's premises/tools/equipment to do work on his private clients, which I thought was a bit extreme

HMRC won't formally notify your Employer that you have another income. Your PAYE tax code might start ringing alarm bells.

[mickk]

Would they not find out through my tax code or has that nothibg to do with it?

Sorry for the stupid quesrtion but I've never been in this position before

[Countdown]

mickk said:

Would they not find out through my tax code or has that nothibg to do with it?

Sorry for the stupid quesrtion but I've never been in this position before

Depends.

If you owe tax from your "sideline" you have the option to pay it to HMRC OR have it collected through your tax code. If you pay it straight away they won't alter your tax code and you will just have a standard 944L code (or whatever it is next year).

Bear in mind that not all employers will twig that you haven't got a standard tax code.

[Siscar]

And also that there are other reasons to have different tax codes, investments for example. Mine dances all over the place every year!

[anonymous-user]

mickk said:

Most of the work would involve weekends and out of my normal working hours, it is the same type of work but would I have to tell my employer?

Haven't checked my contract, that's a good point.

Would my employer be able to find out though as in through my tax code or is treated separately?

I have just done a case against an employee who did some work on the side - the same type of thing as he was employed to do. Now he has a lengthy injunction against him and a six figure legal bill to pay. Many employment contracts contain an express exclusivity clause and all contain an implied fidelity clause that applies regardless of business hours. Working for someone in the same line of business while still employed is generally a no no.

Compliance with your contract apart, there is no reason why you may not be employed in one role and self employed in another.

[anonymous-user]

Given the amount of tax code changes going through our payroll at the moment (since the switch to RTI) and the fact that our payroll is outsourced unless someone within your payroll team is actually monitoring these events I doubt any employer would be able to deduce if someone was also earning on a self employed basis though this process.

[MitchT]

Over the years I've know one or two people who did it. The general consensus is if your contract doesn't forbid it, it's fine, but even then it's common sense not to work for a competitor of your main employer and not to work such long hours outside of your main job as to render yourself too tired to carry out your main job effectively.

[anonymous-user]

What general consensus is that? The general consensus of the case law is that working on the side in the same business sector as your employer's business sector without the employer's permission to do so is a rapid route to a whole bunch of pain.