I regularly get asked “Can you be employed and self employed at the same time?” The short answer is YES, there is nothing whatsoever to stop you from being both employed and self employed.
If you work full or part time for an employer under PAYE (Pay As You Earn – i.e. your tax and National Insurance is deducted by your employer), there is no reason why you can’t start another business in your spare time. Even something as simple as buying and selling on eBay with the intent of making a profit (don’t confuse this with simply selling your old or unwanted goods), or blogging and earning money via Adwords, could mean you are in fact also self employed.
Telling the Taxman
Don’t forget to let HM Revenue & Customs know if you are self employed as you will likely need to complete a self assessment tax return every year. Don’t forget to include your employment income from your P60 in your tax return as well. You will also have to pay self employed National Insurance Contributions although if your profits are going to be low then you may want to apply for a Class 2 exception. There is plenty of guidance available on tax for the self employed.
It may also be worth checking with your employer to make sure you are not breaking your employment agreement – there may be clauses in your contract which prevent you from working outside of your employment, particularly if you are doing something which could be viewed as competing with your employer.