Invoicing as a freelance consultant

pixelgirl · Sep 29, 2010

I need advice on writing my first invoice as a freelance consultant. I have not (yet) registered as a sole trader or a company, but have done a couple of days' work for a local company, which now requires an invoice. We have agreed a daily rate, but have not signed any paperwork. Do you have any advice on how to deal with raising the invoice (do I use my private address in the header and invoice them as an individual?) and how to deal with tax and NI in this instance? Many thanks for any help you can offer!

elaine@cheapaccounting · Sep 29, 2010

Have a read of this to get started:

http://www.startupdonut.co.uk/startup/tax/bookkeeping-for-beginners/q-a-producing-invoices

But also make sure you get your business registered asap

Good luck with it

MyAccountantOnline · Sep 29, 2010

pixelgirl said:
I need advice on writing my first invoice as a freelance consultant. I have not (yet) registered as a sole trader or a company, but have done a couple of days' work for a local company, which now requires an invoice. We have agreed a daily rate, but have not signed any paperwork. Do you have any advice on how to deal with raising the invoice (do I use my private address in the header and invoice them as an individual?) and how to deal with tax and NI in this instance? Many thanks for any help you can offer!

You can simply draw up an invoice showing your name and address, the date, an invoice number and your charges. If you Google invoices you'll see lots that you could use for a bit of guidance.

You do need to register with HM Revenue & Customs as self employed now. Here's a link to what you need - http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm

You'll declare the income (and claim all allowable expenses) on a tax return each year which will go to 5 April and will pay tax based on the income declared. An accountant can do all of this or you can do it yourself if you wish.

Truemanbrown · Sep 29, 2010

pixelgirl said:
I need advice on writing my first invoice as a freelance consultant. I have not (yet) registered as a sole trader or a company, but have done a couple of days' work for a local company, which now requires an invoice. We have agreed a daily rate, but have not signed any paperwork. Do you have any advice on how to deal with raising the invoice (do I use my private address in the header and invoice them as an individual?) and how to deal with tax and NI in this instance? Many thanks for any help you can offer!

I would also make sure you get a contract FOR services in place. You want to do as much as possible to ensure that Revenue cannot challenge your self employment status.

Williams lester · Sep 29, 2010

Truemanbrown said:
I would also make sure you get a contract FOR services in place. You want to do as much as possible to ensure that Revenue cannot challenge your self employment status.

HMRC can challenge whether or not a contract is in place, they will look at the actual working practice not the contract.

Also, as a sole trader, it will the the end client who will be liable should HMRC decide that the OP is an employee.

Truemanbrown · Sep 29, 2010

Williams lester said:
HMRC can challenge whether or not a contract is in place, they will look at the actual working practice not the contract.

Also, as a sole trader, it will the the end client who will be liable should HMRC decide that the OP is an employee.

True. But, it is in both parties interest to get things right, including a contract, now.

elaine@cheapaccounting · Sep 29, 2010

I think I covered that off in my blog post

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