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Original poster

Advice about freelancing while employed

9 replies

TheIroningMaiden · 22/03/2023 22:53

So, need some advice...

I'm thinking about doing some freelance work as a technical writer in my free time alongside my full time job. The thing is I am new to the role (have a background in engineering as well as health but new to being a writer). So I honestly have no idea how much I would make per financial year or if I would fail miserably and earn nothing.
Was reading on the HMRC website that I would need to register as a sole trader.

Now I just need someone to clarify, do I need to register straight away before I start doing any work or is it only after you make £1000 on this businesses that you need to register?
Also with regard to tax, how does it work when you're already employed fulltime?

Honestly please help, any advice on freelancing is welcomed! 😆

OP posts:
user1497207191 · 22/03/2023 23:05

You don’t need to register until you exceed the £1k sales/turnover (nb not profit).

You just declare income, expenses and profit on each years tax return and directly pay tax due - your paye code for your job isn’t affected so you continue to have tax deducted from wages as normal.

Original poster
TheIroningMaiden · 22/03/2023 23:57

user1497207191 · 22/03/2023 23:05

You don’t need to register until you exceed the £1k sales/turnover (nb not profit).

You just declare income, expenses and profit on each years tax return and directly pay tax due - your paye code for your job isn’t affected so you continue to have tax deducted from wages as normal.

That's good to know, as I'm just wary about registering when there is a chance that I end up failing or just making very little anyway due to my lack of experience.

OP posts:
BramblyHedgeMouse · 23/03/2023 18:07

I would be surprised if you were given the option to work as a sole trader for this type of role. I think agencies/ companies would worry that you can be deemed an employee for tax etc...
Usually these contracts are advertised as either Outside IR35 (where you normally work through your limited company, in which case you’ll need to register for a self-assessment, although going through an umbrella is also an option) or inside IR35 (you would essentially be PAYE through an umbrella company).
In your case, since it won’t be your main activity, creating a ltd company might be too much hassle (an accountant will cost you easily £1000 a year), an umbrella would be easier, at least at the beginning.

funfinfen · 23/03/2023 19:16

Check your contract - we wouldn't allow someone to freelance whilst they were working full time for us.

JennyForeigner · 23/03/2023 19:37

I did something like this and was recommended Paystream as an umbrella company, so paying the recommendation forward.

It cost c.£25 per month. An umbrella company acts basically as a legal fiction that they are your employer. They receive the income and declare tax, national insurance and so on, putting into a nest pension if you request. Then they transfer your net pay with a payslip.

It is worth checking your contract for non-compete clauses, but they are about competition. If you are doing something properly outside of your day job it shouldn't be unreasonable.

DogInATent · 23/03/2023 19:47

Check your contract. A full-time job is a full time job. Most FT contracts will prohibit other paid work without permission, whether that's to prevent you poaching/encroaching or just to manage your total working hours.

The HMRC and other organisations have detailed online advice for people considering self-employment. If you earn over the trading income allowance (£1,000) you will have to register for Self Assessment and declare the freelance income for tax (you'll also declare the employed income, but you'll have paid tax on that already).

I have no idea why people are talking about umbrella companies at this stage. If you're freelancing from one commission at a time it seems excessive.

JennyForeigner · 23/03/2023 20:20

DogInATent · 23/03/2023 19:47

Check your contract. A full-time job is a full time job. Most FT contracts will prohibit other paid work without permission, whether that's to prevent you poaching/encroaching or just to manage your total working hours.

The HMRC and other organisations have detailed online advice for people considering self-employment. If you earn over the trading income allowance (£1,000) you will have to register for Self Assessment and declare the freelance income for tax (you'll also declare the employed income, but you'll have paid tax on that already).

I have no idea why people are talking about umbrella companies at this stage. If you're freelancing from one commission at a time it seems excessive.

I was talking about umbrella companies because they were mentioned above and I had no idea what they were or whether they would be right for me until someone on another forum thoughtfully explained.

Is that OK by you, or should we be running any general learning on the Internet by you in case you don't approve of the curriculum?

BramblyHedgeMouse · 23/03/2023 20:36

I think it depends exactly what type of role and industry the OP has in mind. Looking at Technical Writer vacancies on job boards, many are inside IR35 and therefore not self employed. Incidentally the majority are advertised as full time with a day rate, so the challenge for OP will be to find a suitable part time contract that will allow her to work her own hours.

Original poster
TheIroningMaiden · 23/03/2023 22:38

Many thanks for all the advice and information folks! Definitely a lot to ponder…
I may leave it just now as I am definitely feeling way in over my head at the moment learning all about this. 😳

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