Can You Work For A Company And Be Self-Employed?

Can You Work For A Company And Be Self-Employed?

The way we work is changing. Side hustles, freelance work and small businesses are becoming increasingly common, with more people looking for ways to earn additional income alongside their main job.

In fact, Finder's 2026 research found that 46% of UK adults have a side hustle, with average side-hustle income of £201 a week.

So, if you've got a business idea you'd like to explore while keeping your regular job, you might be wondering: can you actually be employed by a company and be self-employed at the same time?

The short answer is yes.

Can you be employed and self-employed?

Yes — in most cases, you can be employed by a company while also running your own business.

HMRC recognises that someone can be both employed and self-employed at the same time. For example, you could work for an employer during the day and run your own business in the evenings.

However, there are some important caveats.

You'll need to check your employment contract, understand your tax responsibilities and make sure your business doesn't create a conflict of interest with your employer.

In other words, having a side business is generally fine — but you still need to follow the rules.

How it works in practice

Employment contract considerations

Before launching your side hustle, read your employment contract.

Look for clauses covering:

• Exclusivity or restrictions on taking other work.

• Non-compete clauses.

• Confidentiality.

• Conflicts of interest.

• Ownership of intellectual property.

• Restrictions on working with competitors or clients.

Your employer may have specific rules about outside work, particularly if your side business operates in the same industry.

Even if your employer doesn't prohibit outside work, you should make sure your business doesn't interfere with your employment responsibilities.

If you're unsure about a contractual restriction, getting professional legal advice is a sensible step.

HMRC perspective

From HMRC's perspective, you can be both PAYE employed and self-employed.

Your employer normally handles PAYE deductions from your salary. If you run a self-employed business, you'll generally need to report your self-employed income through Self Assessment when required.

The two sources of income don't become one job. However, they can affect your overall tax position because your taxable income is considered when working out how much Income Tax you owe.

You'll also need to keep accurate records of your business income and allowable expenses.

Time management and workload balance

This is one of the biggest challenges of having a job and a side business.

Your evenings and weekends can disappear surprisingly quickly when you're answering customer messages, completing orders, doing your bookkeeping and trying to market your business.

Set realistic working hours for your side business and protect time for rest. A simple weekly schedule can help you decide when you'll work on sales, administration and client work rather than trying to squeeze everything in whenever you have a spare moment.

Most importantly, don't build a side business around the assumption that you'll have unlimited energy.

Tax and legal responsibilities

Your employment income and self-employed income are treated differently for administrative purposes.

Your employer normally deducts Income Tax and employee National Insurance from your employment income through PAYE. Your self-employed income is generally dealt with through Self Assessment if you need to file a return.

For the 2026/27 tax year, the standard Personal Allowance is £12,570. For taxpayers in England, Wales and Northern Ireland, the basic Income Tax rate is 20% on taxable income up to £37,700 above the Personal Allowance, followed by 40% and 45% higher bands. Scotland has different Income Tax bands.

National Insurance can also apply. For 2026/27, self-employed people generally pay Class 4 National Insurance at 6% on profits over £12,570 up to £50,270, and 2% on profits above £50,270. Your employer separately deducts Class 1 National Insurance from your employment income where applicable.

The important thing is not to assume that your employer's PAYE deductions cover the tax on your side business. Keep accurate records and set money aside towards your Self Assessment bill.

Benefits and drawbacks of working for a company and being self-employed

There can be some real advantages to having both forms of income.

Benefits

• Security of a regular income: Your employment provides a predictable source of income while you build your business.

• Lower financial risk: You can test your business idea without immediately giving up your salary.

• Flexibility: You can choose when and how you develop your own business, within the limits of your employment contract.

• Opportunity to grow: A side hustle can eventually become a full-time business if demand develops.

• New skills and experience: Running a business can help you develop skills in sales, marketing, finance and customer service.

Drawbacks

• More administration: You'll have another set of records, expenses and tax responsibilities to manage.

• Contractual restrictions: Your employment contract may limit the type of outside work you can undertake.

• Potential conflicts of interest: Running a business that competes with your employer can create serious problems.

• Less free time: You're effectively managing two workloads.

• Risk of burnout: It can be difficult to maintain your performance at work while growing a business outside working hours.

For many people, the benefits make the extra effort worthwhile. But it's important to be realistic about what you can manage.

Tips for managing both successfully

1. Read your employment contract first

Don't wait until your side business is established to discover that your contract restricts outside work.

Check the relevant clauses before you start.

2. Communicate openly where appropriate

Depending on your contract and circumstances, it may be sensible to tell your employer about your business.

This isn't necessarily something to be worried about. Being transparent can help avoid misunderstandings, particularly if your business could overlap with your employer's interests.

3. Keep your finances separate

Use separate banking and bookkeeping arrangements for your business where practical.

This makes it much easier to see how your side business is performing and keep track of income and expenses for tax purposes.

4. Protect your time

Decide how many hours you can realistically dedicate to your business each week.

If you promise customers you'll be available every evening but you're already exhausted after a full working day, you're setting yourself up for problems.

5. Know when to get help

You don't have to become an expert in everything.

An accountant can help with tax and bookkeeping, while a solicitor can advise on employment contracts, intellectual property or other legal questions.

Can I own my own limited company and be employed?

Yes. You can be employed by a company while also owning and running your own limited company.

In this situation, your employment remains separate from your company. Your employer pays you through its payroll, while your limited company has its own legal and financial responsibilities.

You may also become a director of your limited company. If you pay yourself a salary from the company, PAYE and National Insurance rules can apply to that income. If you take dividends, different tax rules apply.

It's worth getting professional advice if you're unsure how to structure the income you take from your company.

If you're ready to make your side business official, SUAZ can help you form your company.

Start your free company formation with SUAZ

How much Income Tax will I pay?

There's no single answer because it depends on your total taxable income, how much you earn from employment and self-employment, your allowable expenses and your circumstances.

For example, imagine you earn £30,000 from employment and make £10,000 profit from self-employment. Your employment income has already used part of your Personal Allowance and basic-rate tax band, so the additional business profit can affect the amount of Income Tax you owe.

If your employment income is already high enough to put you into the higher-rate band, additional self-employed profit may be taxed at 40% rather than 20%.

This is why it's important to look at your total tax position rather than assuming your side-hustle income will simply be taxed at a flat rate. The 2026/27 Personal Allowance is £12,570, with the standard basic-rate band extending to £37,700 of taxable income for taxpayers in England, Wales and Northern Ireland.

These are general examples, not personalised tax advice. If your circumstances are more complicated, speak to an accountant or tax adviser.

Ready to start your side hustle?

So, can you work for a company and be self-employed?

Yes.

For many people, combining employment with self-employment can be a great way to explore an idea, earn additional income and gradually build a business without immediately giving up the security of a regular salary.

Just make sure you check your employment contract, understand your tax obligations, keep accurate records and be realistic about how much time you have available.

And if your side hustle starts to become something bigger, you don't have to keep it informal forever.

Ready to make things official? Form your company with SUAZ for free today and start turning your side business into a fully-fledged company.

Form your company with SUAZ for free