Can anyone tell me what I need to do if I need to invoice someone £200 for freelance work done this year. It is the first work I have done this tax year (I stopped formal out of the home work last year). I have done some formatting and proof-reading work for my uncle, but all through the proper business channels at his end. Do I simply send him (his company) a letter detailing what I did and stating amount? Do I need to separate out VAT or anything (we have an agreed amount for the work)? Do I need to declare this to anyone?
A letter is fine and will act as an invoice. Although Microsoft Word has invoices in the templates section if you want something a little more professional looking.
It needs to have your name and address, your customers name and address, a brief detail of the work carried out and the total payable.
If you are not registered for VAT you cannot charge it so you just need a total amount.
As it is income you should notify the tax office on your annual tax return. I am assuming that you have already told the tax office that you are self-employed. If not, you must do so within 3 months of commencing.
top right : your name and address, email, web and phone (letterhead is advertising after all) below that : full date upper left : clients full name and address middle middle : invoice number 12/001 is a good format to start with body : For - professional services rendered blah de blah to the value of £200 - VAT not applicable to this invoice middle bottom Invoice due on receipt either by cheque to the above address payable to Startshinetiger or by electronic transfer to bank name, sort code, account number
Thanks for your help both! One of the many things I love about MN is that I can come on here and be completely dumb and naive and get very helpful, sensible reponses. Now to get myself registered with tax office!
I have a small part time job that I get paid for so already have a tax code. I also do a freelance work and invoice the clients so my question is when it comes round to doing the tax return forms do i use the tax code that is on may wage slip from my part time job?
Also how do i work out how much i need to put aside to pay the tax?
OP, I was told to start invoices at number 100 as it gives the impression of more experience! I would add payment terms e.g. Payment due within 14 days as it gives you an excuse to ring and chase it up (essential if you do any work for the public sector).
McKeever, you could ring the Inland Revenue for advice (they are quite helpful if you can get through) or else you could grt advice from an accountant. Clients often deduct tax at source even if you are self-employed and it is a pain to get it back.
I meant to add that an accountant can also help you plan your tax payments (I am not an accountant btw - just glad to have the services of one!) You could just put aside 20% but what with advance payments and tax allowances it is a bit more complicated than that, and the Revenue are forever getting it wrong anyway, plus they always seem to assume last year's income is a guide to this year's, which is a pain if it fluctuates.