Taking on occasional contract work whilst employed full time-How to begin?

[djsb]

I've been wondering recently about taking on, or at least not refusing, the occasional offer of work in addition to my full time job.
I'm just wondering how does someone do this legally in the UK. Is it best to talk to an accountant about registering as a sole trader? Or is setting up as a limited company the best route? Or is it just not worth it if work is very occasional or sporadic?
I don't envisage much work coming my way, as I'm not actively seeking it at the moment. However, maybe it could be a good idea to be ready just in case. Has anyone done or is doing this, and how does it work for you? Thanks.


PS Any YouTube video's that cover this subject worth watching?

[themadhippy]

Is it best to talk to an accountant about registering as a sole trade

no need to get accountants involved,just tell the tax man,then fill in your self assessment tax every year

[jpanhalt]

Be sure your current employer allows that.  If so, keep the two jobe scrupulously separate.

[Bud]

If the current employer does not have outside business activities policy, you do not have to let them know. Otherwise it is typically required either to speak to the current manager or submit a form or both. If the outside business is not related to your full time company business and do not take time from workours, they would allow it.

[Veteran68]

I don't know about other countries, but in the US there have been cases where the employment contract contained a clause stating that any creative commercial work you produce while an employee, regardless of whether it's on your own time, is the property of the employer unless and until they grant a release of said work.

I couldn't believe it when I first heard about it back in college in the 80's. I was looking for a job and was talking to the manager of a local Radio Shack. We were gabbing about electronics and I mentioned that I love to dabble and build stuff during my off-time. He gave me a very serious look and explained that Radio Shack would exert ownership on anything I made. I was incredulous, and needless to say, did not pursue a job there. But later on I heard this was really a thing with some corporations, including in the software engineering field which was my field.

I don't know how prolific it is, or if it legally can be enforced everywhere, but I'd make sure to go over my employment contract with a fine toothed comb (or straight up ask your HR dept and get the answer in writing) just to avoid any surprises later.

[jpanhalt]

In the US, non-compete clauses generally must meet the following:
1) Supported by consideration at the time it is signed;
2) Protect a legitimate business interest of the employer;
3) Be reasonable in scope, geography, and time.

They are enforceable in every state so far as I know.  #3 is something of an Achilles Heel, but even if violated, it does not negate the agreement.  That is, scope, geography, and time can be modified while leaving the agreement intact.  That separability clause is part of every contract, or should be if written by a competent attorney.

[CatalinaWOW]

US law often fails, but its basic intent is to codify ethical behavior.  And ethical behavior should be what you strive for, regardless of the legal requirements where you live.

Think of the following cases and think about where you stand on the ethics involved.

1.  You take outside work that directly competes with your employer, and you use training provided by the employer and equipment (computers, software, TE) provided by the employer to perform the work.

2.  You take outside work that directly competes with your employer, using contacts made while performing work for the employer.

3.  You take work in a market that is not currently served by your employer.  Your presence in that market effectively prevents the employer from expanding in that area.

4.  You take work in a field that requires knowledge of engineering, but is totally unrelated to your employers business area (High end audio design for outside work for example while the employer does digital controllers for high volume markets).

5.  You take outside work that consumes so much of your creative energy that you can barely meet the minimum requirements of your day job.

The details are always fuzzy on these things.  The three criteria that jpanhalt measures seem specific, but can easily be muddied.  Consideration at the time it is signed (did you get a signing bonus, and was allocation of salary discussed or implied).  Legitimate business interests is equally fuzzy.  In a large multi-national company is there any facet of commerce that is not of interest to some part of the company.  And reasonable in scope, geography and time is a rubbery concept.

The best approach is to discuss it with your employer and come to an amicable agreement.  In the real world the employer may not be reasonable, and local law may prevent something that would be acceptable to both you and your employer.  But it is best to find these things out before you do something than after.

As a side note.  The Radio Shack approach is not rare in the US.  But business majors reading this thread should think about how those practices were part of an overall management strategy that resulted in a complete business implosion.

[jpanhalt]

The details are always fuzzy on these things.  The three criteria that jpanhalt measures seem specific, but can easily be muddied.  Consideration at the time it is signed (did you get a signing bonus, and was allocation of salary discussed or implied).  Legitimate business interests is equally fuzzy.  In a large multi-national company is there any facet of commerce that is not of interest to some part of the company.  And reasonable in scope, geography and time is a rubbery concept.

I modified slightly the words of a "legal" post found by Google.
1) "Consideration" can be as simple as you were informed at the time of hire.  No bonus needed.  Something like "we pay you fully for your activities as an engineer" will suffice.  It can be even more vague.  I am familiar with an instance were a professional employee was not allowed to perform in a professional musical band locally because of image and and potential distraction. 
2) Complete separation from work can be impossible to achieve.  Do you ever get related calls at work?  Are you on call for work and get calls for that outside work?  Do you ever use your work device to write or look up anything, even outside working hours?  Some employers are generous; others are not to the point of vindictiveness.

Bottom line to avoid trouble is to be sure your employer knows and agrees to you doing anything else for hire or directly related to your work activities (e.g., volunteer work).