Freelance writing - self employed? company? and VAT

[stressed2007]

Apologies as I have posted this question on a number of boards as I am not sure the best place to ask this.

A friend of mine is getting a job doing some freelance writing for a firm. He needs to invoice them for his time on an ongoing basis and they have said something about him setting uo a company to do so. He will only be doing work for them.

Does anyone know the legalities of doing this? I would have thought he just charged for his time and at the end of the tax year files a tax return and pays tax. I do not understand why he has to do this through a company? Does he still need to pay NI? Also doe he have to charge VAT for his services?

Are there any tax reasons why he would want to invoice through a company?

Thanks very much.

i replied to your other post...

I haven't seen your other thread, but can offer the following advice:

Get your friend to register as self-employed. There will be National Insurance contributions to pay, but unless he goes over a certain threshold (I can't remember what it is, but on the basis of earnings from one company, unlikely), no VAT.

There is really no need to set up a company; just keep accounts, and make sure to take expenses off income, so true "profit" is declared, not turnover! No need to cheat oneself!

It not matter how many or how few sources of income there are, nor how many nor how few "employers"; all the taxman is interested in is the total (profit/loss, expenses, etc.), unless there is an audit.

The HRMC website has all the forms for declaring self-employment, too.
Hope this helps!