Starting a business while employed: Start Up Loans, HMRC and when to go full time
Starting a business while employed? Tell HMRC by 5 October if you need to, and know that a job does not stop you applying for a Start Up Loan.
Reading time5 min read
CategoryBusiness guides
Written byThe bizbritain team
Starting a business while employed is allowed, and a job does not stop you applying for a Start Up Loan. There is one date to act on first. If your side business made more than £1,000 in the last tax year and you have never sent a tax return, you must tell HMRC by 5 October 2026.
This guide covers that deadline, what the scheme looks at when you still have a salary, and how to plan the move to full time.
Section 01
Starting a business while employed: do you need to tell HMRC?
Yes, if your side business is trading and earned more than £1,000. GOV.UK says you can run a business and be employed at the same time, for example working for an employer by day and running your own business in the evenings.
The first £1,000 of trading income each tax year is tax-free. This is the trading allowance. If your gross trading income is over £1,000, you must register for Self Assessment.
The deadline depends on when you started. The last tax year ran from 6 April 2025 to 5 April 2026. If you need a return for that year and have not sent one before, you must tell HMRC by 5 October 2026. Register after that date and you could get a penalty.
Registering gets you a Unique Taxpayer Reference. Keep it safe. You will need it for your tax return.
Section 02
Can you get a Start Up Loan while employed?
Yes. Having a job is not on the list of things that rule you out. To apply, you need to meet these conditions.
You are 18 or over and a current UK resident with the right to work in the UK.
Your business is based in the UK.
Your business is new, or has been trading for up to 60 months.
You pass the credit checks and can afford to repay the loan.
If your side business is already trading, count how long. The years you have run it alongside your job are still trading time.
A salary can help with affordability. According to Start Up Loans, a stable income could make it easier to secure funding. Your personal survival budget shows how your wages and the loan repayments fit together.
The loan is personal. You borrow as an individual and you are personally liable for the repayments, whatever happens to the business.
Section 03
Four checks before you apply
Read your employment contract
Some contracts restrict you from running a similar business or using work equipment. Start Up Loans warns that breaking these clauses could lead to dismissal or a legal claim.
Register with HMRC if you need to
Do it before 5 October if the deadline applies to you. Your tax affairs should be in order before you apply.
Write down what the loan is for
Equipment, stock, a deposit on premises or a website. The business plan needs to show how the money turns into sales.
Work out your personal survival budget
This is what you need each month to live on. It tells you how much of your salary you can afford to give up.
Section 04
When to go full time, and how we help
There is no single right moment. Some founders wait until the business covers their survival budget, or until a loan would let it grow faster than evenings allow.
That is the decision point. If you are ready, you can apply for a Start Up Loan while you are still employed.
As a Start Up Loans Business Support Partner, we help you prepare the application. myplan builds your business plan, personal survival budget and 12-month cash flow forecast by asking plain questions. The workbook takes around 30 minutes and it is free for every bizbritain applicant.
Most applicants are approved within one to two weeks of submitting a finished application. The fastest can be approved in as little as a week. Timing also depends on any further information requested and the finance partner's final checks.
Our eligibility check takes 60 seconds and involves no credit search. The formal application does include a credit check, which is a hard search.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
Got a question the guide didn’t answer? Talk to an advisor.
We’ve backed thousands of British founders. If you’ve read the guide and you’re ready to find out what a Start Up Loan could do for your business, our advisors are on the phone now.