Employed and self-employed? Here's what you need to know

Working a full-time job and running a little business on the side? You're certainly not alone!

Whether you're freelancing, consulting or building something of your own, it's perfectly possible to be both employed and self-employed at the same time.

But there are a few things worth knowing when it comes to tax.

Do I need to tell HMRC about my side business?

If your total gross self-employment income is more than £1,000 during the tax year, you'll generally need to register for self assessment, unless an exception applies.

That applies even if you're already paying income tax through your employment.

If your gross trading income is £1,000 or less, the trading allowance may mean you don't need to report it.

Will I be taxed twice?

No!

Your employment income and self-employment profits are taken into account when calculating your overall tax position.

The tax you've already paid through PAYE is credited against your calculation.

For example, if you earn £30,000 from employment and make £8,000 profit from freelancing, your total income will be considered when working out how much tax you owe.

You won't just be taxed twice on your salary.

What about national insurance?

Your self-employment profits may also be subject to Class 4 national insurance, depending on your profit level.

This is calculated separately from the national insurance deducted through your employment.

Can I claim expenses for my side business?

Absolutely, provided they qualify under HMRC's rules.

You might be able to claim costs such as business software, website expenses, equipment and business travel.

Just remember to keep accurate records and separate personal spending from business costs.

Making tax a little easier

If you're employed and self-employed, you'll usually need your employment figures alongside your business income and expenses when preparing your return.

Getting everything organised throughout the year can make the process much less stressful.

Need someone to take care of your tax return?

Returnly makes straightforward self assessment simple, with a fixed fee of £199 including VAT.

Check your eligibility to get started.