Invoicing question

[Lefty]

Interesting one here - I have a Ltd Co. and one of the client wants to pay me a bonus (£1000 net) for a certain piece of work they were particularly happy with.

Ignoring the potential IR35 issue for the moment (!!!), how could I invoice this? Note it says "net". They have suggested that I attach their letter to an expense claim but it's definitely not a legitimate expense.

I asked my accountant and she said I need to add on top personal tax, employees NI, employers NI then corp tax (and VAT of course) and treat the £1000 as if it were salary, then invoice the gross figure of around £2,600 but I'm not sure this is right either. Plus, that will raise some questions from the client as to why I'm invoicing £2600 for a £1000 bonus. Any suggestions?

[Lefty]

condor said:

Couldn't you just call it 'gratuity bonus'?

Yeah, that's basically what I was going to do - but bonuses are a BIK of course, question is - do I charge the client for my company corporation tax liability on the sum as well as personal tax and NI contributions?

[Lefty]

ColinM50 said:

I would raise them an invoice for £1,000 +Vat for Additional services as agreed

Thanks for the advice chaps, this is what I've done. He did mean "net", they give vouchers to Staffies but didn't have enough.

[Lefty]

Eric Mc said:

For goodness sake DO NOT accept vouchers. Apart from the fact that you need to declare them as company income (and account for the Output VAT on their value as well) you are laying yourself wide open to IR35 problems.

The key point about IR35 is that, to avoid any misconceptions about your status, you CANNOT be seen to be in any way like any of their salaried employees (full time or part time).

Indeed