It has never been easier to embark on a self-employed ‘side-hustle’. You could be driving for Uber, delivering for Deliveroo or selling cakes at a local market stall.
You may have wanted to supplement your income, develop your business skills or make money from a hobby. Whatever the reason, there are a few considerations that you will have to keep in mind.
If you are starting a ‘side-hustle’, you might be asking yourself two questions: how do I get started, and what about my employer?
The first thing you will have to do is register as self-employed with HMRC.
If you decide to set up a private limited company, you will also need to register the business with Companies House. If you choose to go down the sole trader route, you will just have to register with HMRC.
If you are looking for simplicity, then the sole trader model would be better suited for you. There is less paperwork and administration involved with running your business as a sole trader. However, if you are taking on debt to run the business, you should avoid going down this route as you will become personally liable for the repayment.
Setting up and running a limited company brings with it a lot of administration and responsibilities. However, the company is separate to you as an individual, so you wouldn’t become personally liable for any company debts.
What about my employer?
A lot of people that do some self-employment on the side often have a nagging doubt that what they are doing will not be well received by their employer. Typically, it would not be a problem, unless it interferes with your employment, but it is understandable that you may have some concerns.
The first point of call should be reading your contract of employment. Some contracts may have restrictions that limit what work you can do on the side. Others will say it is fine to do work on the side, so long as your line manager clears it.
If you are worried that registering as self-employed with HMRC will trigger something with your employer, it won’t. Your tax affairs are entirely confidential. But, if you decide to form a limited company, your details will be publicly available at Companies House.
Connecting with other self-employed people
Depending on what you do, you might want to connect with other self-employed people. If your skills are in baking cakes, but not social media or website design, you may want to use other self-employed people to help you with those.
Second, you might want to build relations so that you can deal with any issues that might occur with your side-hustle. It is not uncommon to see cyclists from Deliveroo congregate in one area or graphic designers attend industry- related conferences.
Starting something on the side is a major step for you, and it may lead to you becoming fully self-employed further down the line. Whatever you are doing, whether it be baking cakes or selling goods on Etsy, you should build connections along the way. The most important thing to know is that while you are striking out on your own, you don’t have to feel alone.
By Tom Purvis