Freelance work whilst in Full Time employment and Taxes


I am a Software Developer and I live and work for a company in the UK and pay PAYE taxes and NI Contributions through my wages for this jobs salary.

I am looking to start working on a couple of contracts as a sideline (not reducing my main jobs hours) that people have invited me to quote for (also in the UK) and I want to know what I should be doing regarding taxes on this work?

Do I need to register myself as a company in some way?
Do I need an accountant?
Do I need to file some tax forms?

Obviously I don't want to have to do these things as I don't want to pay for them at this early stage in my freelancing/consulting career but at the same time I want to be covered and not get fined for not paying relevant taxes.

Other people must be in a similar situation so I would like to know what you are doing in terms of accounts.


Getting Started UK Tax Contractor

asked Jan 19 '12 at 00:16
111 points

2 Answers


You may need to register with the Revenue as self employed: I've no idea if that's also applicable to part time self-employment, but if you don't register and need to there's the usual Revenue automated fine - so best check with a quick phone call to an accountant. If I remember correctly you can register upto three months after you start.

You don't need an accountant, but you may feel it's better, it rather depends how organised you are. At the end of the day you need to be accounting for income and expenses in the course of doing your part time work. That's probably as simple as an Excel spreadsheet itemising these. Most accountants will have a no cost initial meeting, so you could get a feel for what they'd charge and do, and also what items you may be able to claim as valid expenses that you may not have thought of. Even if you then decide to do your own accounts.

answered Jan 19 '12 at 03:07
2,552 points


I'm not an accountant, so can't guarantee this is correct, but I think the simplest thing to do, at least when starting up, is to just declare the income on your Self-Assessment form. You'll need to invoice your clients and keep copies, then just enter the amount you earned into the SA form -- I think the field is something like "Other earned income". Don't forget to save enough to cover the tax bill!

answered Jan 19 '12 at 01:50
Giles Thomas
1,540 points

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