Employed and self-employed at the same time?

paypershop · Site Admin Joined: 16 Feb 2004 Posts: 19

A correspondent has asked for the following question to be posted.

Ian Congreave

There is nothing wrong in principle for a person to be employed and self-employed at the same time. Usually it would be with different "employers" but there is no reason why it should not occur with the same "employer".

I put "employer" in quotes because the business is not an employer in respect of the self-employment.

For this situation to exist, the two jobs must be entirely separate and distinct. You cannot be employed and self-employed doing the same job. So, for example, an electrician who is CIS registered and has tax deducted by the contractor could also be employed by the contractor as an office cleaner, for example. However, it would be difficult for the self-employed electrician to work also as the contractor's maintenance manager, where he would be managing his own self-employed work.

Bear in mind also that a self-employed electrician, to continue the example, would only be working for the contractor for a limited period on a one-off project. If the electrician's work was on-going, that is not self-employment but employment. So you would then have a person with two separate employments with the same employer - not uncommon!
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Ian Whyteside · Posted: Thu May 15, 2008 9:42 am Post subject: Employed and Self Employed

May I add a little bit to this issue?

At a recent review I did for a client I was asked to deal with this very situation of an employee who also entered into a contract for services simultaneously.

This client's (a local authority) tax office asked some interesting questions about the arrangement, for example how did he obtain the separate work and was he given the contract because of his skills or because he was already employed by the council?

Another question concerned when he went part time in his job, in other words did he go part time to pursue a simultaneous self employment career and then obtain this work or was it the other way round?

They also wanted to see his marketing material to see if the council was listed as part of his "cv".

The conclusion was that he sought self employment as his "exit" plan from the council and marketed his business completely separately, the council hired his company and seemed to have no idea that he was already employed and hence the revenue were happy that it was a genuine contract for services and approved gross payment.

This meant the council could stop trying to account for tax withhold from his invoices and he did not have to play silly games on his self assessment returns.

It also shows the revenue are waking up to the way in which many people run their working lives.

Interesting, no?

Ian Whyteside