Multiple Jobs, Multiple Earnings in UK

Many people today are looking for ways to earn extra income. A side project, freelance work, online selling, or a small service alongside a main job has become increasingly common in the UK. Earning more money is naturally appealing—but for most taxpayers, the real question quickly becomes: what about tax?

Can you earn more by being both employed and self-employed at the same time?

Is it allowed, and how does it work in practice?

Do you need to tell HMRC straight away?
Is it complicated or risky from a tax point of view?

This is where we come in. As accountants, our role isn’t to tell you how to grow a business or improve your lifestyle. Our focus is much simpler—and more important: helping you understand your UK tax position, meet your HMRC obligations, stay compliant, and avoid unexpected tax bills.

Starting Out: Can You Legally Be Employed and Self-Employed?

Yes. In the UK, you can be employed and self-employed at the same time. There is nothing stopping you from starting a side hustle while keeping your main job. In fact, this is one of the most common and sensible ways people test self-employment.

Most people start as a sole trader, not a limited company. This approach is simpler, lower-cost, and more flexible while you assess whether the additional income is worth continuing. Limited companies can be useful in the right circumstances, but they bring added complexity and expense and are not usually the starting point for a side business.

Do You Need to Tell HMRC Immediately?

This is one of the biggest concerns we hear—and often unnecessarily so.

If your gross self-employed income is £1,000 or less in a tax year, you do not need to register with HMRC. This is because of the £1,000 trading allowance. You can earn the income without submitting a Self Assessment tax return, although you should still keep basic records.

Once your income goes over £1,000, you will normally need to register for Self Assessment and submit a tax return each year. Registration is done online via the HMRC website. Your tax return will include both your employment income (via PAYE) and your self-employed income.

Do You Need to Tell Your Employer?

This is a common worry for people starting a side business. In most UK cases, being self-employed alongside a job is completely lawful, and there is no automatic requirement to tell your employer. The key is that your side work must not affect your performance, conflict with your employer’s business, or breach your employment contract. It is always sensible to check for clauses such as exclusivity or non-compete provisions.

If you do choose to be open, transparency often helps. Many employers are comfortable with side income when it is carried out outside working hours and does not interfere with the role. The important point is not to hide it unnecessarily, but to ensure your main role remains your priority and your contractual obligations are met.

Why Some People Register for Self Assessment Early

Even if you are under the £1,000 trading allowance, there can still be valid reasons to register voluntarily:

• If your side business makes a loss, it may be possible to offset that loss against other income and claim a tax refund.

• If you plan to apply for a mortgage, lenders often ask for Self Assessment tax returns as proof of additional income.

• If you want a clear and formal tax record from the outset.

That said, completing a tax return comes with deadlines, responsibilities, and potential penalties, so it should be done with purpose.

How the Tax Actually Works

Your Self Assessment tax return acts like a single “bucket” of income. It includes:

• Employment income (already taxed through PAYE)

• Self-employed profit (income minus allowable business expenses)

HMRC calculates your total tax liability, then deducts the tax already paid through your job. Any remaining tax is usually due by 31 January following the end of the tax year.

The income tax rate on your self-employed profits depends largely on your total income:

• If your total income stays within the basic rate band, profits are generally taxed at 20%

• Income above that may be taxed at the 40% higher rate

Importantly, tax is paid on profit, not turnover, which makes good record-keeping essential.

Don’t Forget National Insurance. This is where many taxpayers get caught out.

Alongside income tax, self-employed individuals may also need to pay National Insurance contributions:

• Class 2 National Insurance: a small weekly amount if profits exceed the lower threshold

• Class 4 National Insurance: charged at 9% on profits above a set level

Many side hustles fall below these thresholds in the early stages, meaning little or no National Insurance is due. However, it still needs to be considered. Unlike income tax, National Insurance is not always fully balanced across multiple jobs, so planning ahead is important.

A Simple Rule for Planning Ahead

For most people earning under £50,000 in total income, a simple and practical rule works well:

• Set aside around 25% of your self-employed profitfor income tax and National Insurance

This is not an exact calculation, but it helps avoid cash-flow problems when your tax bill becomes due.

We also strongly recommend using a separate bank account for your side business income. It does not need to be a formal business account, but keeping transactions separate makes record-keeping easier and reduces the risk of errors.

Records Matter More Than Anything Else

The most effective ways to manage UK tax legally and efficiently are:

• Understanding what is allowed (business expenses, allowances, and thresholds)

• Keeping clear and accurate records

Good records reduce mistakes, minimise tax liabilities, and make dealing with HMRC far less stressful.

In a Nutshell

Running a side business alongside employment is common, legal, and often sensible—but the tax side must be handled correctly. With the right setup, basic planning, and good records, most people find it far less complicated than they expected.

If you are unsure where you stand or want tailored advice for your specific situation, this is exactly what accountants are here for.

Seek Professional Help

Whether you’re employed or self-employed, figuring out exactly what you should do isn’t always easy. Everyone wants to earn more, but there’s never a simple answer. Taxes, deductions, and financial planning can feel confusing, and it’s easy to worry that you might be missing something important.

That’s where we come in. At Elaga Accountancy, we take care of the complicated stuff so client can focus on what you do best. Whether it’s managing your salary, handling self-employment income, or planning how to grow your earnings, we make sure everything is done correctly and efficiently.

Leave the stress to us and concentrate on your work or business with confidence. Contact Elaga Accountancy today to make your finances simple, compliant, and worry-free.

***Contact us to learn more.

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