Part-time contracting whilst employed full-time

[kingcook]

so what you are saying if I am a permie developer and stacking shelves at tesco on the weekends taht i could loose my job?.9

Probably not. Unless you came into work on Monday morning falling asleep at your desk.

If you had a 2nd job as say some software developer, working on the next killer app and it happened to make you millions, and say there was some clause in your employment contract stating "we have the right to everything you do in your spare time".... then you'd be screwed.

[css_jay99]

I know you are asking about tax efficiency but if you are in permanent employment check your employee handbook, most companies do not allow free lancing and if found out you could lose your job.

so what you are saying if I am a permie developer and stacking shelves at tesco on the weekends taht i could loose my job?.

To the OP, you could always work via a friend that has a ltd co. i.e. he invoices them and pays you a salary as an employee.... .

css_jay99

[fullyautomatix]

Hi,

I have recently been offered a part-time contract software development job. I intend to spend 10-15 hours a week working on it (evenings and weekends, working from home), whilst remaining in my full-time job.

I am keen to hear opinions on what is the most tax-efficient way to do this, as well as any general pearls for a newbie starting out.

As an absolute maximum, assume the client pays £40 per hour, I work 15 hours per week, and 52 weeks per year. Hence, I would be turning over 40x15x52=£30k (absolute best-case scenario).

Would a limited company be the way to go, or would the overheads relative to a fairly small turnover make an umbrella company the best option?

Cheers,
Dan

I know you are asking about tax efficiency but if you are in permanent employment check your employee handbook, most companies do not allow free lancing and if found out you could lose your job.

[stek]

Assuming no agency surely self employed is the best option...

[draytop]

I'd double check your contract with your Permanent Job.

Some devious employers put a clause in there to say you are not allowed to work for somebody else (even in your spare time!).

[db1145]

All, thanks for the feedback.

Yes I realise it would be naive to base too much on my best case estimates. My thinking was: if it's not worth starting a Ltd with that income, then it definately wouldn't be worth it with less.

[VectraMan]

If you're prepared for some pain, you don't need an accountant. So a Ltd. will maybe cost you £50 to setup, and then £15 a year for the annual return, assuming you can get free banking.

A Ltd. has the advantage that you can pay yourself out of dividends as and when it suits you, which can be good. But you are taking on some responsibility for your company and will get into trouble if you don't do it right.

If you think this is something you're likely to do long term, I'd suggest a Ltd. is by far the best option, but if it's a one off for a couple of months, it's probably not worth the hassle.

[escapeUK]

Cash in hand sounds the better option to me. But of the two options you present definitely Ltd, Im sure you pay enough NI already and just the Employees NI on this sort of sum would pay for an accountant twice over.

[NotAllThere]

In this instance, it's perfectly reasonable to go for best-case, because the OP is saying that even if everything goes really well, his max income is only £30k, so is it worth going limited for that?

(Please excuse the robust response - this is what happens when your post was responded to while it was in General).

[EternalOptimist]

First off, only a single brain celled , southern shandy drinking poofter would base his calculations on the best case scenario.
You need to generate a 'likely' scenario.

typical costs for running a limited would be 350 startup, then 1 - 1.5k accountants fees per year.

You need to make sure this is legal and above board with your permies employer

[db1145]

Hi,

I have recently been offered a part-time contract software development job. I intend to spend 10-15 hours a week working on it (evenings and weekends, working from home), whilst remaining in my full-time job.

I am keen to hear opinions on what is the most tax-efficient way to do this, as well as any general pearls for a newbie starting out.

As an absolute maximum, assume the client pays £40 per hour, I work 15 hours per week, and 52 weeks per year. Hence, I would be turning over 40x15x52=£30k (absolute best-case scenario).

Would a limited company be the way to go, or would the overheads relative to a fairly small turnover make an umbrella company the best option?

Cheers,
Dan