hi alvin,
are you talking about the UK? it would be different in other countries. as far as i have gathered, a research assistant is a job, so it is normal income, so it is taxable. you can be a RA at the same or at a different institution from where you are doing a PhD, or not do a PhD at all. if you are a full time RA, normally you won't be able to be a full time PhD student at the same time - your university won't let you.
in some sense being a RA is a job like any other, and brings with it the dis/advantages that any job will. most people who fund their PhD by working significant hours for money do take longer for their PhD than those who are fully funded, but not all.
if your RA job is very close to your PhD topic, you might be able to profit both ways. on the other hand you might have trouble distinguishing your PhD work from your RA work.