Reply to: Self billing

[Sockpuppet]

First gig was self billing, not a great idea to be fair.

Second gig was tiemsheets with invoice.

I will never do self billing again as its more hassle than its worth. At least with invoices they are more "business" like so lawyers know where you stand when it goes tits up.

[s2budd]

Self Billing

"I can't think of any disadvantages as my experience of self billing has been very good."

Wait until it goes wrong!
I had a problem with Hays, or was it Haze?
Fine for first week. Second to third week there was no VAT added to the invoice. Fourth week, I might have been speaking to Basil Brush for all of the good that it did me. Fifth week.. I left.

Solution. Just don't do it. Find a proper contract with a proper agency.

[thunderlizard]

Self billing is the work of the devil.

It works like this.

(1) Supplier sends itemised invoice, including something that's nontrivial e.g. VAT on expenses, partial discounts
(2) Client picks a random number out of thin air, puts it on an self-invoice, and pays the amount
(3) Supplier phones up and says "Oi! You haven't paid what I charged. If you have a problem by all means query the invoice but don't just make it up!"
(4) Client: "But we do self-billing!"
(5) Supplier: "That's as maybe. You still owe us what we charged you, no more no less."
(6) Client: "But we do self-billing!" The machines do not lie!
etc.

[marcosscriven]

Seems pretty straightforward to me.

The advantages as I see them are:

1. Timesheet is authorised electronically by the client every Friday. Agency releases the funds the following Wednesday, Funds are in my business account on Friday.

2. No need to send invoices to the agency, although I keep a paper copy for my records.

3. The agency can't lose any invoices therefore no fannying around trying to re-submit lost ones.

I can't think of any disadvantages as my experience of self billing has been very good.

My experience too - when I submit my online timesheet every Friday, there is an option to generate an invoice. Money is in my account by Thursday the following week!

There is also the option for a 'Printer friendly' copy of the invoice, and it has my company name and address at the top. So I just save and electronic copy of that.

Marcos

[dmini]

Thats a nonsence arguement...I'm surprised you haven't suggested that paper-boys don't produce an invoice. These examples are not B2B

Agreed - not B2B.
Unless of course you include UK PLC trading as HMRC - who just take the money we send them. . Now that is definitely borderline!
But the comment was made that no business could operate without producing invoices. I just said that some did

[Old Greg]

Seems pretty straightforward to me.

The advantages as I see them are:

1. Timesheet is authorised electronically by the client every Friday. Agency releases the funds the following Wednesday, Funds are in my business account on Friday.

2. No need to send invoices to the agency, although I keep a paper copy for my records.

3. The agency can't lose any invoices therefore no fannying around trying to re-submit lost ones.

I can't think of any disadvantages as my experience of self billing has been very good.

But when I started out, the agency was not paying the VAT element of my invoices and subsequently insisted that they needed to see my VAT certificate. To get them to pay, I had to issue a credit note and re-invoice. I would not have wanted to leave this to them - I was owed money and wanted control. But if you're happy, you're happy. Horses for courses etc.

[billygun]

Seems pretty straightforward to me.

The advantages as I see them are:

1. Timesheet is authorised electronically by the client every Friday. Agency releases the funds the following Wednesday, Funds are in my business account on Friday.

2. No need to send invoices to the agency, although I keep a paper copy for my records.

3. The agency can't lose any invoices therefore no fannying around trying to re-submit lost ones.

I can't think of any disadvantages as my experience of self billing has been very good.

[malvolio]

That's a subtly different point. You have to mutually agree to use self billing, it cannot be enforced.

However the agent could then withdraw the offer (at which point you write to the client and say "Sorry, can't work with you now because pointlesscumbag agency will not negotiate terms".) if you fail to agree to their conditions. I know the effect is much the same, sadly.

[chicane]

Sadly someone is breaking the law. A self-billing operation has to have a "No thanks" option.

I don't quite understand this; my interpretation of the HMRC guidelines is that your customer can refuse to do business with you if you don't agree to self-billing - does this not equate to not having a "No thanks" option?

From the HMRC website:

"We will not oblige you to agree to self-billing. However, your customer may make agreement to self-billing a condition of your making supplies to him."

[Vito]

Then this leaves a business decision to be made...recently when I could have done with the work, I turned down a very lucrative cash-in-hand deal because it didn't fit in with the way I wanted to run my company...these decisions can be very hard and there are no right or wrong answers...but wherever possible, think long term and be true to your beliefs. This often comes down to how confident you are that you are good enough to turn down work based on your way of working.

[malvolio]

Looks like this has been covered before:

http://forums.contractoruk.com/thread5203.html

Sadly, it seems that the agency can refuse to use you as a supplier if you're not willing to enter into their self-billing arrangements.

Sadly someone is breaking the law. A self-billing operation has to have a "No thanks" option. If the agency refuses to play, tell both the DTI and HMRC, who will show a keen interest.

BTW, it has no effect on IR35 status; official opinion is that it's just a more efficient time recording mechanism. But it has to be voluntary, companies cannot dictate another company's financial practices.

[Mustang]

I had the same issue: -

http://forums.contractoruk.com/showt...724#post223724

At the end of the day it is not necessarily an IR35 issue but it never hurts to take every opportunity to be seen acting like all other businesses.

HTH

[chicane]

Looks like this has been covered before:

http://forums.contractoruk.com/thread5203.html

Sadly, it seems that the agency can refuse to use you as a supplier if you're not willing to enter into their self-billing arrangements.

[Vito]

Agree - I want to produce invoices as payment is not made at the time the service (or whatever) is delivered (as it generally would be in the case of a taxi driver or. shop). I check payments against invoices (and sometimes it's incorrect.) The lady who charges me £5 a day to feed my cat while I'm away always invoices me and if I suggested I self-invoice, she'd quite rightly tell me where to go. I'm a newbie and not qualified or experienced to say whether it affects IR35 but it just seems sensible business practice regardless of IR35.

I'm no IR35 Expert either...but I think if you run your business in accordance with what you to believe to be best practice and the proper way to do things then you won't go far wrong.

[Old Greg]

Thats a nonsence arguement...I'm surprised you haven't suggested that paper-boys don't produce an invoice. These examples are not B2B

Agree - I want to produce invoices as payment is not made at the time the service (or whatever) is delivered (as it generally would be in the case of a taxi driver or. shop). I check payments against invoices (and sometimes it's incorrect.) The lady who charges me £5 a day to feed my cat while I'm away always invoices me and if I suggested I self-invoice, she'd quite rightly tell me where to go. I'm a newbie and not qualified or experienced to say whether it affects IR35 but it just seems sensible business practice regardless of IR35.