Ad hoc invoicing

[Spacecadet]

I've just done some work for a consultant friend, no real contract drawn up as it was only a couple of hours work from home. I was initially going to do it for free but she's insisting that I get something an i am skint.

Problem now is how to bill, I use an umbrella company, she's get her own Ltd company. Its only going to be for a couple of hundred pounds but obviously she wants everything above board.

Any suggestions? the only option i can see at the moment is to just send the invoice myself and not involve the taxman.

[ASB]

I've just done some work for a consultant friend, no real contract drawn up as it was only a couple of hours work from home. I was initially going to do it for free but she's insisting that I get something an i am skint.

Problem now is how to bill, I use an umbrella company, she's get her own Ltd company. Its only going to be for a couple of hundred pounds but obviously she wants everything above board.

Any suggestions? the only option i can see at the moment is to just send the invoice myself and not involve the taxman.

Send the invoice yourself and declare it on your tax return as self employed income. You should register a s/e. Call your tax office.

[Spacecadet]

Send the invoice yourself and declare it on your tax return as self employed income. You should register a s/e. Call your tax office.

Cool - thanks for the pointer

[Captain Jack]

Send the invoice yourself and declare it on your tax return as self employed income. You should register a s/e. Call your tax office.

I disagree. This is far too much trouble for a one off couple of hundred quid. When you register as self-employed you have to start paying weekly NI stamps and all sorts of malarkey. Just do a sell-bill invoice (aka a receipt) for your mate and declare it as "other untaxed income" in the general section of your tax return. Job done.

[expat]

I disagree. This is far too much trouble for a one off couple of hundred quid. When you register as self-employed you have to start paying weekly NI stamps and all sorts of malarkey. Just do a sell-bill invoice (aka a receipt) for your mate and declare it as "other untaxed income" in the general section of your tax return. Job done.

Does this mean you can sell things sporadically and just declare the receipts as income, without having to register as self-employed? What criteria require registration then? (roughly speaking, if there is a short answer).

[Captain Jack]

Does this mean you can sell things sporadically and just declare the receipts as income, without having to register as self-employed? What criteria require registration then? (roughly speaking, if there is a short answer).

Yes, however http://www.hmrc.gov.uk/startingup/selfempl.htm# is the definitive statement on the matter. Generally speaking, HMRC will be fine about it if the work is highly sporadic and/or is very unpredictable (i.e. you aren't touting for business) and doesn't in its own right make you pay tax on account.

[expat]

Yes, however http://www.hmrc.gov.uk/startingup/selfempl.htm# is the definitive statement on the matter. Generally speaking, HMRC will be fine about it if the work is highly sporadic and/or is very unpredictable (i.e. you aren't touting for business) and doesn't in its own right make you pay tax on account.

Thanks. Yes, I had seen that page, but it addresses whether you are self-employed or employed.

As in, for example, you like to paint or create stained-glass or whatever, so you decide to see if anyone is interested in buying any of it. Somebody does buy one this month and again in June and 2 in September. Does that mean you're self-employed in May, July, and August too (just unsuccessful?).

I know it's peanuts but personally I don't think you should have to pay the Class 2 stamp in any period when you make no money, or indeed register as "self-employed" for periods when you might not actually be doing anything. If you do, then you are being forced into a commercial model which might be the opposite of the whole point of this.

I suppose the answer if you do run a Ltd Co is just to employ yourself?

[Captain Jack]

At the end of the day it's up to you, Expat. Does a minicab driver become no longer self employed between each fare? Does the Pizza Hut delivery dude become unemployed after he's dropped off your Mighty Meaty? No, of course not, it's all about degrees.

If it's peanuts money (a few hundred quid) and you aren't actively touting for business, HMRC will be fine about you declaring it as "other untaxed income" on the general section of your self-assessment return. If you are advertising your services, looking for business and turning enough that it makes you eligible to pay tax on account, they will mind and you will be fined for not notifying them that you are engaging in a self-employment trade.

[expat]

...If you are ... turning enough that it makes you eligible to pay tax on account, they will mind

That's the unknown!

[ASB]

The letter of the rules is that you must be registered when the work is done (i.e. within a month). For the period of self employment NI is payable at the flat rate plus tax on the profits.

However the IR will not go after you for one off bits (but they can). You can always register, do the work deregister. That would be a good way of winding them up.

The cabbie/delivery boy example fails to a certain extent because they are engaged in a continuing trade.

When I said "shouild" register it was in the context of "you're supposed to", not "it would be a good idea to".

As the Captain says occasional sporadic bits and pieces, slap em in the general section of the tax return and all should be fine.