Invoicing and tax

[londonboy]

I have recently left a company and changed to self employed, so I can pick and choose who to work for etc.

I am in the process of getting an accountant but in the mean time I need to invoice a company for a days work, so what do I have to do about the tax?
I read that if your not vat registered then you dont need to mention tax on your invoices?

 

[WoodYouLike]

If you are not VAT registered you are not allowed to mention VAT on your invoices.
Just make clear to your client that the amount on the invoice is the total amount. And do get a good accountant who can tell you much more about what to do, how to invoice properly, which terms and conditions to use (so you want spend your time chasing for money) etc. He/she can also tell you how to deal with other taxes etc.

 

[poppa34]

WoodYouLike is 100% correct - you can only add VAT on if your are VAT registered, and you display your VAT number on the invoice.

You can register for VAT if you like, but you are only required to do so if your annual (taxable) turnover is over £68k

see here: http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm#2

 

[WoodYouLike]

You can register for VAT if you like, but you are only required to do so if your annual (taxable) turnover is over £68k

The threshold will change on 01.04.2010 to £70k as announced in this week's Budget

For even more details on changes for businesses due to the new Budget see this Budget Summary

 

[kevindgas]

registering for VAT means that you can claim Vat on all your purchases even fuel for your van it is simple to do and if you get it right you won't pay much more than you claim

things like petrol/diesel for private use can be a bit tricky if you do it on a percentage basis, We don't, We pay a fixed fee each quarter (200ish) and then claim 100% Vat on all fuel. it probably costs a few quid extra but saves a lot of paperwork.

cash accounting is the best for a small business you pay VAT on income when you receive it, not when you invoice, and claim on each purchase or account payment you make.

Really good accountants are hard to find, but find the right one and they will save you £££££s (last year i saved over £3k for a fee of putting in his bathroom suite!!)

 

[WoodYouLike]

Really good accountants are hard to find, but find the right one and they will save you £££££s (last year i saved over £3k for a fee of putting in his bathroom suite!!)

Now I'm confused (.com)

Did you sav £££££ because he is such a good accountant or because you gave him a freebie and he therefore returned the "favour"?

 

[kevindgas]

Really good accountants are hard to find, but find the right one and they will save you £££££s (last year i saved over £3k for a fee of putting in his bathroom suite!!)

Now I'm confused (.com)

Did you sav £££££ because he is such a good accountant or because you gave him a freebie and he therefore returned the "favour"?

sorry, my accountant is actually a personal friend as well as a bloody good accountant.
we have a sound relationship he does my accounts for free in return i do all his small jobs through the year - no money changes hands and we are both happy
the bathroom fit was this years fee!! he supplied/paid for all the materials and i did the labour (his good lady did the tiling Yippee!!)

 

[noseall]

I have recently left a company and changed to self employed, so I can pick and choose who to work for etc.

I am in the process of getting an accountant but in the mean time I need to invoice a company for a days work, so what do I have to do about the tax?
I read that if your not vat registered then you dont need to mention tax on your invoices?

You will still be liable for income tax no matter what.

 

[spareshunter]

Don't tell em Pike!!!!!

 

[kirkgas]

sorry, my accountant is actually a personal friend as well as a bloody good accountant.
we have a sound relationship he does my accounts for free in return i do all his small jobs through the year - no money changes hands and we are both happy
the bathroom fit was this years fee!! he supplied/paid for all the materials and i did the labour (his good lady did the tiling Yippee!!) [/quote]

surely this statement just confirms you have a bent accountant as this arrangement is liable to tax for both of you

 

[kevindgas]

surely this statement just confirms you have a bent accountant as this arrangement is liable to tax for both of you

no it doesn't as i don't employ him, he helps me to file my return by advising
in return i can do things for people for free if i so wish. there is no law against helping friends. i also do a lot of charity work again nought to do with the tax man.

 

[WoodYouLike]

You tell him Kev!

 

[kirkgas]

surely exchanging work with someone is taxable, there was a case a few weeks ago where 2 female coppers got into trouble for sharing childcare with each other as they were on different shifts, please post your full name and address and i will pass the details to my sister in law as she works with the social security office

 

[kirkgas]

charity work is completely different from working for someone, surely exchanging work with someone is taxable, there was a case a few weeks ago where 2 female coppers got into trouble for sharing childcare with each other as they were on different shifts, what is the difference from what you are doing to someone else doing work for payment in kind which is def taxable. please post your full name and address and i will pass the details to my sister in law as she works with the social security office

 

[WoodYouLike]

Sound like a true case of "nanny state"