Out of Hours Work on PAYE


I am PAYE software developer. I have recently done some work for my company out of hours, for an agreed sum. I am not a sole trader or a limited company, but I’ve been told as the work was done in my own time, I can invoice the company instead of getting it paid via PAYE. I do a self assessment every year anyway because of family tax credits, so I don’t see it as a problem.

My question is, can I invoice the company as an individual and what are the benefits of doing it this way? I’d presume when I declare the income, it would be taxed at the same rate as my salary? I’m also not sure how I’d declare it.

Any advice would be appreciated.

The income tax rate would be the same but presumably the company are trying to get you to do it this way so they (and you, to be fair) don’t have to pay class 1 national insurance or pension contributions on the money.

On the other hand it HMRC might argue that it is simply overtime and expect full NI contributions to be paid as well as income tax.