Setting up a business while still employed?

[teenyweenytadpole]

Hi all, I have a part time job but am about to embark on training for a new career. The training will be part time over a period of about a year. Once I qualify I want to be able to start taking on clients but initially will keep my part time job, although my plan is to phase that out. Can I set up a business while still employed somewhere else? I am assuming I can, but I am just wondering how the tax thing will work, will I be classed as employed or self employed? Will I then need to submit two separate tax returns? DH has an accountant that I can ask about this, but I was just wondering. I am really keen to get a business name registered so that it feels more "real". Thanks.

Is your new career in the same field? If it is then your employer may not be very happy about you working for them, while also being self employed. Your contract should say whether or not you can have another job while working with them.

Re tax, once you are registered as self employed you will need to submit an annual tax return, on this you will put your self employed income as well as income from employment, this all goes on one tax return.

Hi, thanks - no not the same field at all, and my current employer knows what I'm planning. It was more the tax situation I was concerned about, but that makes sense, thanks.

loads of people do this indeed I do - you register as self employed -one form - and then you do one tax return - you will continue paying your tax from your employment as PAYE and use the infomation from your P60 to fill in your tax return

you register as self-employed but i got a tax accountant when i overlapped paye and s-e jobs because it's a bit complicated.

only annoying thing is you need to pay NI contributions as s-e even though you're also paying through your paye job.. but it's not much.

I was going to put that in - if you expecting to earn under a certain amound you can fill in another form which means you DON"T have to pay NI on SE income - I can't remember how much it is - but its called small earning exception

The exception for Class 2 NIC is £5,595 (I had to check for myself). Class 4 is based on a % of profit, which you'd also pay if s-e AND making enough profit.

and "profit" is a very ethereal figure ....

Please could anybody advise on the answer to this question if you are setting up as a limited company, as opposed to self-employed? Thank you.

makingit - that's fine, in any one tax year you can be employed, self-employed and a director of a limited company (I am in most years), you just need to file all the paperwork on time. Dos that answer your question?

Yes it does, thanks hackney!

I would take advice on setting up a limited company - its adds to the cost and paperwork of setting up in buisness but can have tax advantages in some cases. I think you can call your buisness whatever you like - you don't need to register it - not

I agree with An0therName - a limited company has specific legal requirements so worth having an accountant.

HMRC have loads of information on their site. They also used to do free business start up information sessions - try them or Business Link (what's left of it).

Here is a very simple explanation of becoming self-employed, written for artists, but generally applicable.