Should you tell your boss you’re starting your own business?

Getting round your employer - and the tax man

When you’ve got your idea and you know how you’re going to do it, there are still some practicalities that have to be dealt with…like the taxman, not to mention your boss. And it is certainly advisable to stick by the rule book. As long as all taxable income is declared to the Inland Revenue, via the self-assessment system, there is no problem with running a business while employed. In short, you can still keep your tax code at work, allowing you to pay PAYE and self-employed tax simultaneously. When starting a business make sure you register with HMRC within three months. HMRC’s support team is a helpful contact if you have any queries.

Telling your employer


Action point: Could a loan help you to start a business? See how we may be able to help here and here

So the taxman is pacified, but what about your employer? You might be happy to work all the hours God sends in a frenzied labour of love, but will they be as enthusiastic? It is possible to capitalise on understanding employers by converting them into customers, but can you, in fact, should you even tell?

While there is no legal obligation to tell the employer if you are running your own business, but there may well be a clause in the Contract of Employment requiring the employee to declare any other work. Once you have checked your contract it is at your discretion as to who you tell – or whether you spill the beans at all.

“My employers knew nothing at all of my business plans – I don’t think it would have been sensible to have talked about it until it was really off the ground,” said Janet Granger, who started her own business selling needlepoint embroidery kits for dolls house collectors in 1996. Working as a full-time library assistant, Granger managed to keep her plans from her employers, but she doesn’t recommend it.

“I kept being vague about what I did in my spare time, which must have seemed suspicious. At times I tried to make sketches for designs at work and if anyone came across these it was difficult to explain without me appearing to be some sort of alien. I wouldn’t recommend keeping secrets – it’s very hard work – but in my situation it was better to keep quiet.”

Hidden talents

Granger was spending a couple of hours every night devising embroidery designs to build up a selection, before marketing the kits. “Much of my time was spent writing to every dolls house shop that I could find, explaining the kits and enclosing a sample.

I soon found I had to change jobs and shifted to a job share of just three days a week. By the time I knew it was going to work, I walked out after a dreadful day and put my efforts full-time into making the business profitable.”

But while keeping her new venture under her hat worked for Granger, only you can know what is best for you, depending on your working relationships and the culture of your company. It might even work to your advantage to be open, demonstrating hidden talents to your employer.

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  1. Elliott Bailey
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    You’re totally right that is a hard keeping that thing you’re so excited about close to your chest and not telling anyone! Def pros and cons.

    I’d go a bit both ways – get your business off the ground then if it’s looking like it might actually work you could start to let people know then! This way if it tanks you haven’t lost face with your colleagues or your boss who may think you’re no longer committed.