Can I be self employed and have a second job?

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In the UK, it is perfectly legal to have a regular job (where you are an employee on a payroll) and be self-employed at the same time. Many people do this to earn extra money, test a business idea, or turn a hobby into cash.

Here is what you need to know to do it correctly.

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1. Check Your Main Job Contract

Before you start, you must check the written contract for your day job. While the government allows you to have two jobs, your employer might not.

Look for a clause about “Exclusivity” or “Conflict of Interest.”

• Competitor Rule: You usually cannot work for a competitor or start a business that competes with your current employer.
• Exhaustion: Your employer has a duty of care. If your second job makes you too tired to do your main job safely, they can stop you.
• Reputation: You cannot do anything that would damage your employer’s reputation.

Do I have to tell my boss? Legally, no—unless your contract says you must. However, if your contract is silent, you can usually keep it private.

2. Understand the Tax (The “Trading Allowance”)

You do not need to tell HMRC about every single penny you make immediately. The UK has a £1,000 Trading Allowance.

• If you earn less than £1,000 in a tax year from your side hustle: You do not need to tell HMRC or pay any extra tax. You can keep it all tax-free.
• If you earn MORE than £1,000: You must register as self-employed and file a tax return.

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3. How Paying Tax Works

Having two income streams works like this:

• Job 1 (Employee): Your employer deducts tax automatically before paying you (PAYE). You don’t need to do anything here.
• Job 2 (Self-Employed): You receive the full amount from your customers. You must save a portion of this money yourself to pay the tax bill later.

Important Warning: Your tax-free Personal Allowance (usually £12,570) is almost always used up by your main job. This means you will likely pay tax on all profit from your self-employment (usually at 20% or 40%, depending on your total income).

4. The “Tricky” Part: National Insurance

This is the most complicated part of having two jobs. You might pay National Insurance (NI) twice, but the rules are different for each job.

• Class 1 NI: This is taken from your main job salary automatically.
• Class 4 NI: You pay this on your self-employed profits if they are high enough.

You need a skilled accountant for this Calculating Class 4 National Insurance correctly when you already pay Class 1 NI at your main job is pretty complicated. There is a maximum limit on how much National Insurance you should pay in total across both jobs.

If you just rely on basic online calculators, you might end up paying too much. A skilled accountant can look at your calculations to ensure you are not overcharged. It is often worth paying for professional help here to save you money in the long run.

5. Keeping Records

You must keep a record of everything you buy and sell for your self-employed work. You cannot just guess at the end of the year.

• Keep receipts for expenses (laptop, software, travel).
• Keep invoices or records of every sale.

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Summary Checklist

1. Read your employment contract to ensure you aren’t breaking company rules.
2. Keep earning until you hit £1,000 in sales (gross income) in a single tax year (April to April).
3. Register for Self Assessment with HMRC once you cross that £1,000 line.
4. Find an accountant to help you file your return, especially to check your National Insurance calculations so you don’t overpay.

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