Newbie Questions

**malvolio** · 15 January 2006, 13:01

Never ceases to amaze me how many people want to go freelance without understanding even the basics of how companies work.

Anyway - standard and often repeated advice applies (yawn...). Go read the first time guide on this site and on www.pcg.org.uk. Then seriously think about joining the PCG anyway.

To answer your original questions, your money and your company's money are different things, and you and your company are different legal entities. Do not ever mix them up. Money for you from YourCo comes via salary, expenses and (hopefully!) dividends on profits. It's no different to how it works as a permie. Or don't you know how you get paid now?

Invoicing is up to you, but may be defined (or otherwise constrained) in the contract. Weekly or monthly are usual - basically you invoice the agency (that's who your contract is with after all) and they pay the money into your nominated business account. Where their money comes from is not your problem, that's why they take a cut off the top of the rate.

You can always ask SJD how they work (use them - they have done it all before, are very helpful and will talk to you, honest!) but basically you keep them advised on incomings and outgoings via a rather nifty spreadsheet and they tell you what to pay to whom and when.

Go do the research properly, this is not a game and you can get hurt if you're not properly prepared. Good luck!

**faxfan** · 17 January 2006, 10:49

Sorry, I thought this was part of my research. I now know where to come for friendly advice.

**planetit** · 17 January 2006, 11:21

Originally posted by faxfan

However I'm a little unclear on how the invoicing and SJD's interaction with my business account with work?

You control the bank account. SJD work for you. They will give you an excel spreadsheet (you can actually download it from their site even if you’re not a customer). Into this you enter the invoices you raise (how often you invoice depends on your client/agent), company expenses, and payments received. Reconcile it with your bank statement at the end of each month.

Assuming you are outside IR35, SJD will agree a salary with you. They send you payslips each quarter telling you how much to pay yourself and how much the tax man. Every 3 month you email them the spreadsheet. They will help you with the VAT calculations and dividends if you need it. At the end of your financial year you send them the spreadsheet and copies of your bank statements and they prepare the accounts and tell you how much tax to pay and when.

Not thay complicated really.

**malvolio** · 17 January 2006, 11:44

Originally posted by faxfan

Sorry, I thought this was part of my research. I now know where to come for friendly advice.

So it is. But you're asking questions that are answered in the material I quoted and elsewhere on these fora. So the assumption from grumpy old cynics like me is that you haven't done any research. Usually that proves to be the case!

Also, a point to remember is that usually we charge lots of money for our time and you get it here for free. The advice may be abrupt but it is accurate and useful. Friendly comes extra...

**planetit** · 17 January 2006, 11:57

If you’re so pissed off with answering these trivial questions, and think its waste of your valuable time. Then why do you bother?

Nobody forces you to post here do they?

**tim123** · 17 January 2006, 12:02

This is the basic stuff that the accountant should have explained to you.

If you are having to ask it here either,

a) you are a numpty for not asking your accountants to explain.
b) your selected accountants are no good at their job.

There is a serious point here. You should have a good rapport with your accountant, you shouldn't be afraid to ask a question of them to avoid looking stupid, he is the expert, you are not. If you don't feel that you can approach your accountant with simple questions you may find that being in business is not for you.

tim

**malvolio** · 17 January 2006, 12:11

Originally posted by planetit

If you’re so pissed off with answering these trivial questions, and think its waste of your valuable time. Then why do you bother?

Nobody forces you to post here do they?

No - nor do I have to listen to your childish ravings either. But that is not the point.

Faxfan is the latest innocent in a long line of people asking questions to which they really should have the answers before they start trying to be a contractor. If I can stop them making mistakes, make them think a little more about what they are getting into and generally do something to try and make the average contractor look a little more professional then I will do so. Call it my penance for having to read some of the supposedly informed drivel we get around here.

It's well known I don't suffer fools gladly, although at least I do suffer them. What really pisses me off is people complaining that they don't like the advice given - if they can't cope with my flavour of direct, they really shouldn't be a contractor. They'll get a lot worse from their permie line management.

**Mustang** · 17 January 2006, 12:33

Faxfan, I have to agree with Malvolio on this one. The contracting world is a harsh one and there is more to it than just "doing a job" - you are running a company. This is something that a lot of people seem to underestimate. In my first year I have had several challanges to contend with - including taking a company to court - and it has really opened my eyes. There is a lot out there to take in and sort out.

Some tips for you:-

* Register with Business link to attend some of their free seminars. Contact details on the web or in the phone book

* Talk to HMRC. They also offer free half day seminars and they are well worth it. They will cover all the basics so that you can post more informed questions on here.

* Talk to you accountant.

Hope that helps and Good Luck!

**planetit** · 17 January 2006, 13:41

Originally posted by malvolio

No - nor do I have to listen to your childish ravings either.

In which case, calm down, relax and ignore the guy. He’ll find the answers soon enough. Or someone else will step up to answer. You’re not the first self styled contractor guru to inhabit these boards, and you won’t be the last.

Incidentally there is nothing new in my advice, you will see it being given to thousands of excitable people like you on message boards across the world.

Newbie Questions