How to make a second job ‘on the side’ work for you

MORE and more Britons are taking on side hustles to raise cash as living costs soar, many of them pensioners looking to top up their retirement income. The number of side hustles has grown by almost half in the past two years, new data from Godaddy shows, with UK head Ben Law saying that “many are turning to enterprise out of economic necessity and to earn extra cash”.

Many older people want to stay active and involved, too, or pursue a long-cherished business opportunity.

The UK now has an army of more than four million self-employed people, making up almost one in six of the workforce, the second highest in the world after Italy.almost 1.75 million are aged between 50 and 64, with another half million continuing into their late 60s and even 70s.

Older workers are more likely to be self-employed than younger workers, official figures show, but making it work can be a real battle.

SELF-STARTER

Whether you are serving in a café, making deliveries, house sitting, dog walking, copywriting, teaching or decorating, you need to work at your freelance job or side hustle, said Albert Azis-clauson, chief executive of freelancer platform and community Underpinned.

The hardest part is getting going, although that is a lot easier if you already have contacts and experience.

Finding clients is tough for those just starting afresh or switching careers.azis-clauson said: “Start by building a website and advertising yourself on social media and Linkedin, or use freelance platforms.”

You have to be bold and put yourself out there. “Draw on friends and contacts, search for opportunities, send speculative emails, try cold calling and hone your pitching skills,” he advised.

DO THE HUSTLE

Resist the temptation to undercharge. “Avoid wasting time on free or cheap work that could be better spent finding clients who will actually pay what you need,” Aziz-clauson said.

Late payments are one of the biggest challenges, with more than half reporting they have not been paid for work done, Underpinned’s research shows. It is urging employers to sign up to its new Freelance Charter to treat freelancers and self-employed workers fairly.

“Agreeing a contract and some upfront payments can help protect you from late or non payers,” Azis-clauson said. Otherwise focus on building a cash safety net.

“Set up an invoice system to track payments and prompt you to chase late payments,” he said.

Keep proper accounts and set money aside to avoid getting hit with a shock tax bill and potential fine by HM Revenue & Customs. “Start by reading the government advice on Gov.uk,” Azis-clauson added.

TAXING TIME

You must submit a tax return if you have untaxed income of more than £1,000, said Stevie Heafford, tax partner at accountants HW Fisher: “The deadline for a paper return is October 31, or January 31 online.”

You need to look after yourself as well as your business, said Sarah Coles, Hargreaves Lansdown’s senior personal finance analyst.the selfemployed do not benefit from a workplace auto-enrolment pension scheme and employer contributions.

Yet the Family Resources Survey shows that only one in five save in a pension, compared to four-in-five employees, creating a huge selfemployed pensions gap. Paying profits into a pension is a great way to lower your income tax and National Insurance bill, and you can claim tax relief on contributions, Coles added.

GET PROTECTION

Side hustlers do not get sick pay, income protection or life insurance through the workplace, and many struggle to fund this from their own pockets. Ben Heffer, insurance expert at business information service Defaqto, suggests income protection, which pays out if you cannot work due to sickness or disablement.

“Some policies will pay out until you are well again but others will only pay out for a limited period, say 12 or 24 months, so always check,” he said.

Income protection is sold by insurers such as Aviva, Canada Life, L&G,

LV= and Vitality, typically through specialist insurance brokers such as Lifesearch.com.

‘Avoid wasting time on free or cheap work that could be better spent finding clients who will actually pay’

PRICING POWER

As inflation soars so will your costs, so consider upping your prices, too, said Mike Parkes, tax expert at Gosimpletax: “Most people should understand your need to increase your prices.” Track all your business expenses and keep receipts, as you can offset those against profits, he added. Keep on top of any regulation, in particular upcoming Making Tax Digital changes, which are now only 18 months away, Parkes said.

Freelancers and the self-employed earning more than £10,000 will need to use approved software to track income and expenditure in real time.

The self-employed face plenty of other challenges, too, for example mortgage lenders often set stricter affordability criteria.

Millions dream of working for themselves but when it comes to the crunch, you are on your own.

Just remember that side hustles demand just that. Hustling.