I've been working on a combined self employed and employed basis for 8 years now, I didn't say tax free, I said low, as in I don't pay the same tax on that self employed work as I would do if I was earning it in my employed capacity, in general it works out closer to a dividend income rate than the standard income tax brackets for me at least, and when I started out and I was earning less than £5 or £6k a year self employed I never paid tax on that portion of my income, I always ended up with a small tax repayment from what I was paying on my main job due to the expenses I could claim through self employment, plus as a start up I had a lot of equipment and training to buy as well. I was certainly working self employed full time before I got my first tax bill from it. A big one for a lot of people is the ability to write off CPD courses as an expense (let's say you're a fitness instructor, so already qualified, but now want to do your yoga teacher training as well, you could claim that £4k as an expense, whereas you couldn't claim the initial training. You could also claim for say a course on using linkedin to generate sales because it's directly related to your business and not for personal use), as well as obviously computer, phone, broadband, vehicle costs (which for many are substantial and for me since I used my car a good 70-80% of the time for self employed work meant I could get a large tax relief allowance, I've since changed to a commercial vehicle so this works differently again), PL and PI insurances, professional memberships, if you work from home proportional costs on any designated workspace, any equipment, travel, workwear (logo/branded not just a suit but for example a plumber with 'Bill's plumbing' embroidered on his top could claim the top), marketing, advertising, stationary, printing costs, I don't know if they still do but HMRC used to run half day courses on what could and couldn't be claimed. Obviously it does depend what field you're in as to what allowances you reasonably can claim but when I got an accountant there were a lot of things I'd been missing, rather than over claiming. Any expense you claim has to be necessary for the business, not personal use, but with things like my phone for example, I easily use that 80% for business use, so I can claim 80%, however if I didn't have the business my bill wouldn't have been 80% lower, because the fixed flat costs such as the line rental and handset are there regardless, it's only the bundle that varies somewhat depending on use, if if I use it for 2 hours of calls a week personal use or 50 hours of calls business use my bill doesn't vary that much. My home broadband, I'd have that regardless, but I certainly need it for my business, so being able to claim a large part of it as an expense makes a difference. With a car or a new computer even the figures are even more stark. If you earn under £1000 you don't need to register for tax anyway as of a few years ago.