How to not be on the wrong side of the law with your second job
The Royal London has released research suggesting that 16% of the UK have second jobs to boost their income during the cost-of-living crisis.
With more people taking up second jobs or “side hustles”, Alexander Mellis, an employment barrister at No5 Barristers’ Chambers outlines some legal considerations that people may not be aware of when taking on extra work.
Should I tell my employer about a second job/side hustle and can they stop me from getting one?
“This will depend on your employment contract. Many employers include a clause stating that you need to ask permission if you want to take on extra work, although they should not unreasonably withhold this permission. If there is a non-compete clause, preventing employees from taking on a second job with a competitor in the same industry or a similar role, then this might be more of a problem.
“On the occasion that someone works in a potentially dangerous environment such as using heavy machinery, to prevent any health and safety issues such as due to over-tiredness an employer might also be entitled to withhold permission.
“If it is a “side hustle”, essentially working for yourself, this is more of a grey area, although again if it is competing with your employer or causes problems for them they may be entitled to ask you not to. If you are wanting to take on a self-employed role to boost your income, the recommended route would be to speak with your employer to make sure all parties are happy.
“As long as it doesn’t infringe on your original contract or cause your employer problems, they should not stop you from finding extra work.
“Speaking with your employer prior to securing extra work will also let them know in advance that your income tax code is subject to change.”
What are the repercussions of getting a second job/side hustle that is in breach of your contract?
“Should you get further employment that goes against what is stated in your clauses, your employer could choose to implement disciplinary proceedings. This may result in your employment being terminated or facing other consequences in line with your role. It is best to ensure that any second job or side work you take in is in line with your contract to prevent any of problems arising later.”
Will you have to do your own taxes if you take on a second job/side hustle?
“For a second job, where you are employed by a business, your employers should still handle your tax. Informing them about any other employment is sensible so that they can handle your codes accordingly with the current legislation in place.
“For a side hustle, where you would be working for yourself, you will have to likely have to file a separate tax return to ensure you pay the correct amount of tax on your further income.
“It is important to note that if you take on a second job or a side hustle, your yearly income will rise, potentially putting you into a new tax bracket. It is important that you and your employers consider this to ensure that you are paying the right amount.”
What will happen if you fail to correctly do your taxes?
“If HM Revenue & Customs see that you are earning more than what your employer is reporting then you will be placed on an emergency tax code until the right amount has been paid. If you continue to not pay, then you might face enforcement action until the total is cleared and may be charged penalties. If you are in any doubt seek advice.”
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