File my own taxes

[dave90]

Hi there,

I have been a contractor in the past, and used both Ltd Companies, and Umbrella companies. I've potentially been offered some software development work direct from the company. Maybe around 3 months.

I have self assessment account setup and have filed income for renting properties for example. Could I file my own taxes for this type of work?

Thanks in advance,
David

[northernladuk]

You'd have to check with your client. They may have an issue paying you as self employed as that could make them liable if you don't pay your taxes or something like that. You don't say what else you've got going on so hard to say what is the most efficient way but it might be out of your hands depending on what the client says.

Find out what is possible with them first so you've got your options then pick the one that suits you best. If they will only pay a company then you'll need to get some advice on the most efficient method. If you don't need the cash then it's probably better to find a brolly that will allow you to put it all in to your pension so you don't get taxed on it. But find out what your options from the client are first and then plan.

[Lance]

Hi there,

I have been a contractor in the past, and used both Ltd Companies, and Umbrella companies. I've potentially been offered some software development work direct from the company. Maybe around 3 months.

I have self assessment account setup and have filed income for renting properties for example. Could I file my own taxes for this type of work?

Thanks in advance,
David

yes but you should register as self-employed with HMRC. Register for Self Assessment: Register if you’re self-employed - GOV.UK (www.gov.uk)

And as NLUK says, check that your client(s) are happy with paying someone who is self-employed. If they're small then it should be fine.

[dave90]

Thanks for your replies.

That sounds promising so far. I have nothing else going on at the moment. The contract is outside IR35. This is where its gets tricky, as I think I would need to apply VAT to the invoices I raised? I remember this was done in the past with my contracts, but they were through an agency.

I prefer to file myself, but maybe I should use an umbrella for ease.

Thanks again

[Fred Bloggs]

Thanks for your replies.

That sounds promising so far. I have nothing else going on at the moment. The contract is outside IR35. This is where its gets tricky, as I think I would need to apply VAT to the invoices I raised? I remember this was done in the past with my contracts, but they were through an agency.

I prefer to file myself, but maybe I should use an umbrella for ease.

Thanks again

Will your turn over exceed the vat registration threshold? If not, there's no need to vat register. You can register a limited company in a few minutes at Companies House. Depending on how simple you keep things, if you are an experienced Ltd Co contractor, DIY is perfectly possible. I have used QuickFile for book keeping and HMRC on line portal myself for reporting and it isn't difficult if you keep things simple and you are careful. DIY isn't for everyone, but it's perfectly possible with a bit of planning and attention to detail.

[Lance]

Thanks for your replies.

That sounds promising so far. I have nothing else going on at the moment. The contract is outside IR35. This is where its gets tricky, as I think I would need to apply VAT to the invoices I raised? I remember this was done in the past with my contracts, but they were through an agency.

I prefer to file myself, but maybe I should use an umbrella for ease.

Thanks again

If self-employed then there is no IR35.
You need to add VAT only if you're VAT registered. Which you won't be if self-employed until you exceed the £85k threshold.

Why on earth would you use an umbrella?
Either use LTD or be self-employed.... And if a LTD then just get an accountant as you don't have anywhere close to the knowledge needed to do your own accounts. Fine for self-employed as SATR does all the numbers for you.

[Fred Bloggs]

If self-employed then there is no IR35.
You need to add VAT only if you're VAT registered. Which you won't be if self-employed until you exceed the £85k threshold.

Why on earth would you use an umbrella?
Either use LTD or be self-employed.... And if a LTD then just get an accountant as you don't have anywhere close to the knowledge needed to do your own accounts. Fine for self-employed as SATR does all the numbers for you.

Yes, reading it again. You're right.

[northernladuk]

Why on earth would you use an umbrella?
Either use LTD or be self-employed.... And if a LTD then just get an accountant as you don't have anywhere close to the knowledge needed to do your own accounts. Fine for self-employed as SATR does all the numbers for you.

There used to be a threshold where an umbrella was more efficient than a LTD for small sums. I think it used to be 30k but that was before expenses and haven't seen an updated figure yet. Going brolly and sticking the lot in his pension would be the most efficient way wouldn't it?

But we dont' have a clue what the rest of his year looks like or what he's doing so who knows.

[Fred Bloggs]

There used to be a threshold where an umbrella was more efficient than a LTD for small sums. I think it used to be 30k but that was before expenses and haven't seen an updated figure yet. Going brolly and sticking the lot in his pension would be the most efficient way wouldn't it?

But we dont' have a clue what the rest of his year looks like or what he's doing so who knows.

If OP can dump the entire gig proceeds into his/her pension then it might be better self employed and avoid paying a brolly for essentially doing nothing. That's if the client is OK with self employed, ofcourse.