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Silly question - one-off payment for a small job

(9 Posts)
roundandroundthehouses Sat 21-Nov-15 12:09:29

I know this is kind of basic, but I haven't been in this position before and want to do the right thing!

Dh and I are both contractors, in different areas of IT, and work through a joint limited company. As I'm also a carer I work far fewer hours than dh. Both of us take a salary from the company, and when things are going well we also take lump sums as dividends.

Recently a friend put me in touch with someone who needed one or two days' work done. It's vaguely IT-related, but not the type of work I do now, through our limited company - it's what I did in my previous career. We agreed a rate, and I've done the work. It comes to about £300.

However, I'm not sure how I should take payment. I could maybe invoice him through our limited company like a normal client. It's IT work in a very, very broad sense, but not related to the normal services we provide. I originally intended to do this, and quoted the client an hourly rate plus VAT. He suggested that instead I just give him my bank details and he transfers money directly to me. Presumably this is because he doesn't want to pay the VAT?

I'm wondering whether I should:

- just invoice him through the company anyway, VAT and all - but strictly speaking the work isn't related to the service the company provides.
- give him my bank details and let him transfer the money to me without going through the company, and then declare it as self-employed income at tax return time. Is that an option?

dodobookends Sat 21-Nov-15 13:12:22

Are you registered as self-employed as well as (I assume, since you have dividends) being a director?

And is the client suggesting that he pays you direct as way of evading VAT and will only pay you the net amount?

Perhaps you should ask your accountant what they think.

roundandroundthehouses Sat 21-Nov-15 15:57:12

Thanks, dodo - client is most probably trying to 'do us both a favour' in the way that people suggest paying tradesmen. I imagine he wants me to knock money off and assumes that I just wouldn't declare it.

No, I'm not registered as self-employed. Does that mean that I couldn't just declare it as extra income when I complete my tax return? We're joint directors of a limited company for our normal business. I may want to do more of this type of work in the future, so perhaps I'd be best to invoice him properly, and shoehorn it into the remit of our company as 'IT Services' or something.

roundandroundthehouses Sat 21-Nov-15 15:58:34

(Sorry, to be clearer - we are registered as both directors and employees of the limited company. This is common amongst IT contractors.)

Hoppinggreen Sat 21-Nov-15 17:24:31

Sorry but it I don't understand why you aren't just invoicing him in the usual way. DH and I are joint directors of a limited company like you are and while he does purely IT I do various other things but we still invoice all clients in the same way.

roundandroundthehouses Sat 21-Nov-15 17:58:18

Hopping, that was sort of my question. I wasn't sure whether you can invoice via a limited company for work that's a fair bit different from the usual categories of work that the company does.

DeoGratias Sat 21-Nov-15 19:28:29

You can have a limited company plsu a separate employment plus be a sole trader. You then invoice for the company or sole trader depending how the work comes in. Entirely up to you. As you say if this is done via you not the company then you pay your (higher usually) tax on it when you submit your tax return.

Hoppinggreen Sat 21-Nov-15 20:13:10

We invoice for IT consultancy, Sales Training and Business Development through the same company.
I see no reason why you can't invoice for several different things, we do and it's never been a problem

roundandroundthehouses Sun 22-Nov-15 12:50:13

Thanks to all. I'm going to just invoice him as normal through the company, as that does seem to be possible.

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