Need to issue an invoice, not self employed
Discussion
Hi all
I need to do a bit of work for a mates company that I used to do it through my ltd, I have now gone back to perm work. He now wants me to do a bit more work, its not much £100 or so and not much of my time.
Mate wants an invoice though for his accountant.
I don't want to go self employed for what could be at most £500 or so a year, is there anyway that I can do this? Can I just give him an invoice or am I likely to get picked up for not payment of £50 tax and then get battered by HMRC?
I need to do a bit of work for a mates company that I used to do it through my ltd, I have now gone back to perm work. He now wants me to do a bit more work, its not much £100 or so and not much of my time.
Mate wants an invoice though for his accountant.
I don't want to go self employed for what could be at most £500 or so a year, is there anyway that I can do this? Can I just give him an invoice or am I likely to get picked up for not payment of £50 tax and then get battered by HMRC?
If you are doing work for your mate and he's going to pay you then it's taxable. That's how employment works. 
All he needs for his records is an invoice from someone.... anyone... maybe even a casual migrant worker passing through. Not necessarily you. *cough*
ETA: Or you could invoice him yourself, not declare it to the Revenue, and take the risk of the Revenue not inspecting him in the next five years.
All he needs for his records is an invoice from someone.... anyone... maybe even a casual migrant worker passing through. Not necessarily you. *cough*
ETA: Or you could invoice him yourself, not declare it to the Revenue, and take the risk of the Revenue not inspecting him in the next five years.
Edited by AcidReflux on Tuesday 3rd August 13:23
I'd issue the invoice in your name.
Then, if you get clobbered for self assessment add all the costs you can think of that could be attributed to the raising of the invoice (work from home allowance, cost of phone calls, cost of stationery, mileage to and from his site) to work down to zero the tax...
HTH
Then, if you get clobbered for self assessment add all the costs you can think of that could be attributed to the raising of the invoice (work from home allowance, cost of phone calls, cost of stationery, mileage to and from his site) to work down to zero the tax...
HTH
Finished the washing up Chris?chris.mapey said:
I'd issue the invoice in your name.
Then, if you get clobbered for self assessment add all the costs you can think of that could be attributed to the raising of the invoice (work from home allowance, cost of phone calls, cost of stationery, mileage to and from his site) to work down to zero the tax...
HTH
What about overdue NI?Then, if you get clobbered for self assessment add all the costs you can think of that could be attributed to the raising of the invoice (work from home allowance, cost of phone calls, cost of stationery, mileage to and from his site) to work down to zero the tax...
HTH
The thing is I don't mind paying the taxes etc but my understanding is that if you register as Self employed you have to pay the NI stamps until you unregister? If this is the case I would be paying every week/ month even if I only do a job every 6 months, which would mean the job not being worth it.
I am employed so am already paying the NI from that.
I am employed so am already paying the NI from that.
n3il123 said:
The thing is I don't mind paying the taxes etc but my understanding is that if you register as Self employed you have to pay the NI stamps until you unregister? If this is the case I would be paying every week/ month even if I only do a job every 6 months, which would mean the job not being worth it.
I am employed so am already paying the NI from that.
If you believe your self employed income will be below a certain amount (between 4-5k IIRC) you can register to be exempt from further payments. I'm sure Eric will be along with the correct form numbers and requirements shortly I am employed so am already paying the NI from that.
jon- said:
n3il123 said:
The thing is I don't mind paying the taxes etc but my understanding is that if you register as Self employed you have to pay the NI stamps until you unregister? If this is the case I would be paying every week/ month even if I only do a job every 6 months, which would mean the job not being worth it.
I am employed so am already paying the NI from that.
If you believe your self employed income will be below a certain amount (between 4-5k IIRC) you can register to be exempt from further payments. I'm sure Eric will be along with the correct form numbers and requirements shortly I am employed so am already paying the NI from that.
n3il123 said:
Can I just give him an invoice or am I likely to get picked up for not payment of £50 tax and then get battered by HMRC?
Maybe, but his company will be in trouble for not paying NI and keeping back the tax. A company can't just pay random individuals in cash, otherwise everyone would do that.What does the work involve? For a few hundred quid a year maybe he could just buy you something that would help with the work, a tool, piece of test equipment, computer etc?
Just ring the tax office, register as self employed, tell them you won't be earning much and thus you shouldn't be paying NI and submit a self assessment tax return at the end of the year (which you may already be doing?). It won't take that long. Unfortunately if you want to be self employed, you have to act like you're self employed and pay tax.
Or, register with an umbrella company who will invoice your mate and pay you via their payroll, but depending on how they charge for their services it might not be worth doing. You'll pay tax and employees' NI too.
Or, just send him an invoice yourself and hope HMRC don't investigate you. The penalties will probably be less than your earnings but I've no idea how likely it is to happen and it's best not to get on the wrong side of the taxman I'd imagine.
Or, register with an umbrella company who will invoice your mate and pay you via their payroll, but depending on how they charge for their services it might not be worth doing. You'll pay tax and employees' NI too.
Or, just send him an invoice yourself and hope HMRC don't investigate you. The penalties will probably be less than your earnings but I've no idea how likely it is to happen and it's best not to get on the wrong side of the taxman I'd imagine.
bogwoppit said:
Just ring the tax office, register as self employed, tell them you won't be earning much and thus you shouldn't be paying NI and submit a self assessment tax return at the end of the year (which you may already be doing?). It won't take that long. Unfortunately if you want to be self employed, you have to act like you're self employed and pay tax.
Or, register with an umbrella company who will invoice your mate and pay you via their payroll, but depending on how they charge for their services it might not be worth doing. You'll pay tax and employees' NI too.
Or, just send him an invoice yourself and hope HMRC don't investigate you. The penalties will probably be less than your earnings but I've no idea how likely it is to happen and it's best not to get on the wrong side of the taxman I'd imagine.
Is this the way it works? I always thought that if didn't cross the threshold £4,250? then there is nothing to be done.Or, register with an umbrella company who will invoice your mate and pay you via their payroll, but depending on how they charge for their services it might not be worth doing. You'll pay tax and employees' NI too.
Or, just send him an invoice yourself and hope HMRC don't investigate you. The penalties will probably be less than your earnings but I've no idea how likely it is to happen and it's best not to get on the wrong side of the taxman I'd imagine.
Myself: I do the occasional bit of consultancy and have to "invoice" someone in the next couple of weeks for around 1/3 of the allowance. The last bit of consultancy I did was several years ago.
Even with that infrequency, do I still register and then complete a tax return (presumably with a whole lot of zeros in it most years) from now on?
What happens to my tax code with my main employer?
Edited by dxg on Tuesday 3rd August 16:52
Deva Link said:
A company can't just pay random individuals in cash, otherwise everyone would do that.
Yes they can, provided there's an auditable trail of invoices/receipts. How the random individuals handle their tax obligations is up to them, not the person paying for their services.I'm self-employed. I invoice my clients as an individual. I wouldn't go as far as to say I'm 'random' but I can be pretty close.
AcidReflux said:
Deva Link said:
A company can't just pay random individuals in cash, otherwise everyone would do that.
Yes they can, provided there's an auditable trail of invoices/receipts. How the random individuals handle their tax obligations is up to them, not the person paying for their services.I'm self-employed. I invoice my clients as an individual. I wouldn't go as far as to say I'm 'random' but I can be pretty close.
The company is supposed to satisfy itself of your status. I'm not saying they all do in every case, but they're supposed to.
jon- said:
n3il123 said:
The thing is I don't mind paying the taxes etc but my understanding is that if you register as Self employed you have to pay the NI stamps until you unregister? If this is the case I would be paying every week/ month even if I only do a job every 6 months, which would mean the job not being worth it.
I am employed so am already paying the NI from that.
If you believe your self employed income will be below a certain amount (between 4-5k IIRC) you can register to be exempt from further payments. I'm sure Eric will be along with the correct form numbers and requirements shortly I am employed so am already paying the NI from that.
Deva Link said:
AcidReflux said:
Deva Link said:
A company can't just pay random individuals in cash, otherwise everyone would do that.
Yes they can, provided there's an auditable trail of invoices/receipts. How the random individuals handle their tax obligations is up to them, not the person paying for their services.I'm self-employed. I invoice my clients as an individual. I wouldn't go as far as to say I'm 'random' but I can be pretty close.
The company is supposed to satisfy itself of your status. I'm not saying they all do in every case, but they're supposed to.
The Revenue are happy with both sides of the arrangement. It's similar to the OP's situation except that my wife's income justifies the paperwork involved in staying above board. That choice may not be so clear for the OP.
AcidReflux said:
My wife is full-time employed by the NHS but does £400-worth of consultancy on the side each month on a self-employed basis for a single client.
If she does the work regularly and at the direction of the client then there's a danger that she could be determined to be an employee.Deva Link said:
AcidReflux said:
My wife is full-time employed by the NHS but does £400-worth of consultancy on the side each month on a self-employed basis for a single client.
If she does the work regularly and at the direction of the client then there's a danger that she could be determined to be an employee.Gassing Station | Business | Top of Page | What's New | My Stuff