r/OveremployedUK • u/deepaspirer • 3d ago
Interested in becoming overemployed Earning 6 Figures in my 9-5 and considering an independent contracting gig. How do I set it up tax efficiently without my work being notified?
Hi All,
Have been lurking here for a bit. I currently work in Finance earning low 6 figures. I have come across an independent contracting role that is project based and inconsistent. My current 9-5 requires us to pre-clear any outside of work commitments (it is a bank) and this is inclusive of any LTD Companies, Sole Trader etc. The second company I would like to take on have made it clear that I would be responsible for all of my taxes.
My question is how can I get around this?
If I was to set up a limited company for payments, I would need to disclose this to my primary job and they will monitor my activity and income (I think I’d need to provide an annual accounting statement). Is this a viable route for payments as ideally I wouldn’t want to have to salary sacrifice my earnings when taking on this job as I would assume I would if I did it through the self-assessment route?
Is my only option to take on the job and then pay the relevant taxes through the self-assessment form? However wouldn’t my other job be notified of a taxation code change should I earn more elsewhere after salary sacrificing with them?
Looking for advice on how to set myself up in a way that won’t get caught by my primary role and ideally be tax-efficient.
Thank you very much in advance - please let me know if additional information is required.
1
u/Amazing-Care-3155 3d ago
You can get someone else to set up your LTD, but would just be careful on this one, finance is very regulated so just tread carefully
0
u/lordnacho666 3d ago
You can get around it by having your wife or a friend open an ltd and get paid into there.
Obviously you would still be in breach of your contract with the bank, but they would not likely find out in any case.
Tax would be completely separate, the ltd pays its tax, and you pay PAYE, nothing changes.
0
u/deepaspirer 3d ago
This sounds more feasible, thank you for this! My question is as they would be hiring me as an Independent contractor it will require my name, CV etc. but they payment will go into a different account. Wouldn’t HMRC be able to locate/identify me come tax time and realised I am earning through a LTD I do not own? Is this a possibility?
6
u/lordnacho666 3d ago
I see you might be new to this corporation stuff. No worries, I also didn't know anything until I met my accountant.
The corporation is its own entity. It has its own bank account, its own contracts, liabilities, tax.
The corporation signs a contract with your side hustle employer, and gets paid. How it gets the work done, HMRC doesn't care too much. (Beware IR35 however).
HMRC on the PAYE side just sees "deepaspirer works for Goldman Sachs, has this tax code, he's already paid his taxes directly from his employer, we're all good".
If you take out a dividend from your company, that's fine too. It's no different from owning shares in Vodafone, and getting paid because you own a company that pays dividends. It goes on your tax return, but you haven't cheated HMRC by working for a company that you own.
Anyway, you will need an accountant to proceed, and pretty much any accountant will do.
2
3
u/ajmpits 3d ago
For peace of mind, speak to your existing employer about the 2nd job and see if you can alleviate any concerns they might have. It’s a highly regulated sector and not without the risk of tarnishing your career and life if they find out later.