working on side project on weekend while working full time

[alec1975]

I am working full time and thinking about working on small short term weekend project.

I have never done this before so not sure if i need to setup a LTD company or i can just pay normal tax on my earning. I will take a total payment at the end of this project.

[Eric Mc]

a) Will the profits from the extra activity be subject to Higher rate income tax?

b) Will the sole trader profits be liable to Class 4 NI?

b) Will you need quick access to the funds generated to the profits generated?

If the answer to the above are as follows -

a) Yes
b) Yes
c) No

Then a limited company would "protect" the profits from personal taxation as long as the profits are left in the company. Of course, the company will pay Corporation tax of 20% (or even 19% as the rate is reducing) on those profits.

For this and next tax year, you can take the profits out of the company in the form of dividends up to £5,000 without paying ANY personal Income tax. From 6 April 2018 this £5,0000 limit is being reduced to £2,000.

[edc]

You should also check your employment contract to see if there are any restrictions, permissions or notifications required for taking on other work or employment.

[deckster]

edc said:

You should also check your employment contract to see if there are any restrictions, permissions or notifications required for taking on other work or employment.

Particularly if you are using skills obtained at work, contacts made through work, tools provided by your employer, or doing work that could be considered in any way to be in competition with your employer.

[edc]

In addition to that there are things such as the WTD to consider http://www.xperthr.co.uk/faq/where-an-employee-has... and also depending on the nature of the work health and safety practices. You wouldn't want your HGV driver or heavy machinery operator pitching up after next to no sleep.