A Cost-of-Living Crisis Review: Taking on a Second Job and What This Means as an Employee.

With the cost-of-living crisis dominating our news, it is unsurprising that nearly 90% of all UK adults have reported that their cost of living has increased.* As a result, individuals and families are looking for ways to combat the rise in costs and generate more income.

A recent Royal London report shows that 16% of the workers they surveyed would take on an additional job to pay for increasing costs, with a further 30% saying they will do so if costs continue to rise.

If those figures are true, then the 16% of those surveyed would equate to over 5 million people across the UK. If you are amongst this number, then what are your rights around taking a second job and what implications might you need to consider?

Legal considerations:

Broadly speaking, it is not unlawful for you to take on a second job if you are not intent on working in competition with your current employer and causing serious harm to their legitimate business interests.

Before taking on a second job, however, you should check your existing contract to see whether it contains any restrictions that would prevent you from doing so.

Often, all that is required is that you obtain your current employer’s prior written consent.

If there is nothing in your contract, then you should be fine to go ahead, provided you are not working in competition with your existing role or there is no risk of bringing your employer’s reputation into repute.

In either case, it is advisable to have a conversation with your current employer as failure to obtain their consent could give rise to a disciplinary matter. Once they understand your financial obligations and your willingness to be open with them, odds are they will be supportive of your position.

So do try to find an amicable route through negotiating a second role. In approaching this, make sure you have considered the impact of taking on a second role; both on your existing position and your well-being. This should help you to address any concerns your current employer may have.

Where your current employer has reservations, you could suggest a trial period so that it can satisfy itself and that there will be no adverse impact on your performance and/or well-being.

Working hours:

Due to increasing cost pressures, your current employer may not be able to offer you additional hours within the business. As such, you may be able to take a second job to supplement your income.

Employers do, nevertheless, have a responsibility to protect the health and safety of all staff and to make sure that their working hours do not pose a risk to themselves or others or, in the absence of an opt-out agreement, exceeds the ’48-hour’ limit.

Where such concerns are raised, however, an employer must take reasonable steps to remove these risks. These could include requiring you to stop working a second job or reduce your working hours.

Know your rights:

If you are employed by someone else, then you are entitled to rights as an employee. You should expect a contract for each role you undertake, which outlines key things such as your title, responsibilities, hours, pay, place of work, pension and benefits.

Understanding tax:

As a UK employee, you have a 'personal allowance'. This is the amount you can earn without paying any income tax.

Having a second job doesn’t necessarily mean that you will have to pay more tax; this will depend on whether you earn more than your personal allowance. HMRC will, however, regard your income as a single figure made up of the total earnings from each job, and apply income tax to the overall figure.

If your total earnings exceed your personal allowance, you will pay tax at the applicable income tax rate on all income above the allowance (although the allowance itself will remain untaxed). The standard personal allowance in the UK is currently £12,570.

You should be aware that your extra income could also push your total annual earnings into a higher tax bracket. If you live in England, Wales or Northern Ireland, there are three marginal income tax brackets – the 20% basic rate, the 40% higher rate and the 45% additional rate (where your personal allowance starts to shrink once earnings hit £100,000).

Where your total earnings exceed £12,570, HMRC will usually view your higher-earning job as your main income, and your other job as a supplementary income. Your personal allowance will be allocated to your main income and your second job will usually be taxed at the basic rate of 20%.

If the combined salary from your two jobs is less than your personal allowance, then you may wish to contact HMRC to avoid paying too much tax.

If you are concerned that you are paying too much or too little tax, you should contact HMRC to check that you are being taxed accurately.

If you would like any further advice or wish to discuss legal support for a settlement or tribunal, contact Sara Mayhew at sara@sara-mayhew.co.uk

*ONS,2022; https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/articles/whatactionsarepeopletakingbecauseoftherisingcostofliving/2022-08-05