Help! Anyone understand contracting?

[tightgriponthepursestrings]

DH was made redundant 6 months ago. His industry was badly hit by covid and he's been unable to find permanent work. Recently he was offered 4 weeks work by a old colleague which he accepted, starting last week. Contact told him to just "invoice" him. We've never done this before- how does it work and what's the best approach? Should he set up a ltd company (seems excessive fir what might only be one months work)? If he just invoiced the chap and reported it later on his tax return is that ok?

He's employed full time in the role....

Is he a sole trader?

Check IR35 to see if the contract is inside or outside it first of all
It’s been delayed due to Covid but may affect him. He may not be a Contractor at all
He doesn’t need to be a LTD co but it’s not a bad idea. Also has he got professional indemnity insurance?
I am mainly familiar with IT consulting but am happy to answer questions if I can

He can be a contractor without setting up a company. Submit invoices for the work and make sure you set aside a % of it once paid, to cover the tax that will be due later.

He should also register to pay NI (I think possibly class 1, but it's been a long time so do double check that online).

If he's going to continue as a contractor, he can look into whether he needs insurance and also check the rules of IR35 (basically designed to protect people from being treated as contractors when really they are operating as employees). I would not worry about either of those things for 4 weeks' work though.

Hope it all goes well!

If he hasn't worked since 01 April, then he may be under his tax allowance for the year anyway, but it's still a good habit to set aside a portion of the invoice payment for the future tax bill.

Thank you. Just googled....It's inside IR35. He doesn't have the ability to get someone else to do the work or choose when to go into work etc.
This might be the only bit of contracting he does so setting up a ltd company seems a bit overkill. Presumably if he just invoiced them for days worked, got paid, kept back the tax amount and then paid it through his tax return is that enough? What about NI?

Just seen mutteringdarklys response. Thank you. Think that's probably what we will do - hopefully the contracting is a very temp thing as he really needs something permanent and regular and his work doesn't really lend itself to contracting.

If it’s inside IR35 it’s a bit complicated because the “employer” has to agree it’s inside and has to set things up differently. It is also possible that he should be an employee
I think if you are sure it’s a one off I would just invoice and mention it on the next tax return rather than set up properly as it does involve effort.
Being a Contractor is great but there is a lot more to it that doing the job and sending an invoice, it’s not as straight forward as a lot of people think

IR35 itself doesn't apply to sole traders. What does apply is the employment versus self employment (employee status test). But it's the employer/engager who has to deal with that and make the decision. As a sole trader, the OPs' partner can rest easy that if the engager has got the status wrong, it's the engager who'd be liable to HMRC. So, OP, he just needs to raise invoices, declare it on his personal tax return, and he's good to go. Certainly don't waste time thinking about or setting up a limited company for just 4 weeks of work.

Presumably if he just invoiced them for days worked, got paid, kept back the tax amount and then paid it through his tax return is that enough? What about NI

Yes, this is enough. NI is calculated along with tax when doing the tax return.