The Pros and Cons of Moonlighting

Working two jobsIt’s no great surprise that, despite the economy being strained and large numbers of people finding it difficult to get work, a significant proportion of the population are working at least two jobs. The term moonlighting used to refer to someone who had a secondary form of employment, separate to their main source of income, which they worked during their ‘off’ hours.

Although this is still essentially the case, changes in the employment market have created new opportunities for additional earnings that are far less easy to define.

Most people associate moonlighting with a desire to earn extra money but that isn’t always the case. Although those who are desperately trying to pay off debts or find they simply don’t earn enough money from their day jobs make up the majority of moonlighters, some have other motivations.

If you want to switch careers, taking a part time entry-level job within your chosen profession while continuing to work your main job can be a great way to gain some experience of the new profession. Working two jobs also doubles the opportunity for networking – something that could could have a positive effect on your future career. 

There are also those who simply enjoy working and find they have too much time on their hands, even if their main jobs are secure and relatively well paid.

A report issued by Her Majesty’s Inspectorate of Constabulary at the end of 2012 found that 23,000 serving police officers – more than one in ten of the total working in England and Wales – have second jobs.

Police officers are allowed to moonlight if they seek permission from their superiors and stay away from pubs or private security work where there may be a conflict of interest. Despite these rules, investigations were carried out in hundreds of cases leading to 65 warnings and 10 dismissals for breaching rules.

Provided all your employers are aware of the situation and adjust your taxation accordingly, you are allowed to have as many jobs as you like. It is those who work a second job for cash or fail to declare additional income that risk difficult.

Modern technology means many people are able to moonlight from the comfort of their own homes. The Internet has led to a major growth in the so-called ‘shadow economy’ with an increasing number of people making money from selling items on eBay and other online marketplaces.

Though Her Majesty’s Revenue and Customs will more or less turn a blind eye to anyone selling a few items every now and then to de-clutter, many people are generating second incomes of tens of thousands of pounds from online sales but failing to declare tax or National Insurance on the money they make.

Last year HMRC launched a campaign to clamp down on this form of tax avoidance, using software which trawls auction sites and compares identities to existing tax records. Both eBay and PayPal have been known to release information about the identities and earnings of account holders to the police on request.

Those caught face fines of up to 100% of any tax owed – enough to almost wipe out any additional earnings for those paying tax at the higher rate.

Whatever your reasons for moonlighting, it pays to ensure you are operating within the law and being fully compliant with current tax legislation. Failure to do so could leave you seriously out of pocket.