I'm about to go Self-Employed - have a couple of questions!

Liszon

Hi there,

I'm a freelance photographer launching my "one-man" business soon, and to do this nice and legal, I decided that in the next tax year, I will go self-employed.

When I was reading through guidelines from various sources, some questions still remained:

- If don't make any profit (good to be that optimistic, but that could happen) how should I show that in my tax return? Also, if I have a full-time PAYE job as well, should I attach any documents about that?

- I'm planning to start the business around June, 2013 but I bought some of the equipment around october-december, 2012.
Can I claim an Annual Investment Allowance on these tools, even if I acquired them months before I went on to be self-employed?

- Invoicing: Is there any necessary information/field what I should always include on my invoices? Should I break down the price to show the amount of tax my clients should pay or I can just print on the final price, tax included?

- Electronic invoices are probably accepted by the taxmans, but should I make my clients to sign them somehow?

- Is there any genuinely free invoicing solution you would recommend?

Thank you for your help in advance,
Best Regards:
Artur

RadoJo

Your tax return has a section where you can show your incomings vs your outgoings which automatically calculates whether or not you have made a profit, so that should be fairly easy.

I have never had to submit invoices as a matter of course, but have never worked anywhere that invoices were signed except for internal records. I only ever break down the cost of my services - unless you are VAT registered, I wouldn't worry about taxes as it's your job to pay the tax and therefore not really any of your clients' business.

Hope that helps - can't offer any thoughts on the other things as I don't have any equipment for my business! Good luck...

trailingspouse

Congratulations on starting you new business soon.
- your self-assessment form needs to include information about ALL your income, including PAYE and other things that are taxed at source (eg interest on savings)
- not sure about the Annual Investment Allowance - probably best to talk to an accountant, that's what they're there for. I do know that it's possible for your business to buy items from yourself, but that might be more appropriate if you were setting up a limited company.
- invoices need to include your trading name and address, details of how you want to be paid (eg by cheque, BACS), how many days terms you will give, VAT number if you're VAT registered, date of the invoice, and it's useful to include an invoice number for your own records. Oh, and the amount.

InsideInsurance

trailingspouse wrote: »

- invoices need to include your trading name and address, details of how you want to be paid (eg by cheque, BACS), how many days terms you will give, VAT number if you're VAT registered, date of the invoice, and it's useful to include an invoice number for your own records. Oh, and the amount.

They must actually give the details of the legal entity the person is contracting with - in the case of a sole trader that is the persons own name not their trading name. They can also include a trading name if they want but it is technically optional.

Method of payment, days credit etc are all sensible suggestions but not a legal requirement.


To the OP - remember that our tax system works on the basis of accruals NOT cash. As soon as you raise the invoice you must count it for tax purposes from that date not the date you get paid. If the client fails to pay you then have to bad debt the invoice which then backs it out of the calculations.

For Self Assessment it is of little issue as you do the form 9 months after the end of the financial year so you'd expect all invoices to be paid or bad debted but once you hit the VAT threashold (or voluntarily register) it becomes more of an issue because your paying the dues to HMRC before you yourself have been paid if you have payment terms of anything beyond "instant"

Liszon

Good to know these, thank you guys for the suggestions!

Mistral001

Liszon wrote: »

Hi there,

I'm a freelance photographer launching my "one-man" business soon, and to do this nice and legal, I decided that in the next tax year, I will go self-employed.

I thought all freelance photograghers were self-employed. Do you not mean that you going freelance?

heather_helo

1) keep your p60 you will need the figures to fill in your employment
if you ever get a hmrc inquiry (heavens forbid) you will need this.

2) yes can get AIA (up to 25k - but remember keep invoices as proof) if your doing your own tax return download cap allowances notes - it has a guide and working sheet to help keep track of your capital expenditure

3) invoices should have name, address, contact details, price of services. no tax unless vat registered, (turnover 75k to be compulsorily registered) can opt in though if you want (silly idea though)

4) sequentially number invoices and print 1 off for your records. dont have 2 number sequences for electronic/paper copies. proof of payment been banked is a better proof than a signature.

5) invoicing - several free ones, but go on excell and look at the templates - can customize and save invoices from there.

hope this helps,

starbutton

I get my client to pay on the day and deposit about 2 weeks before at our meeting. The invoice I send out is from a template in word. I have also used an free online template which looked very pro and has an option for putting in status of payment for example 'paid'. Google it :-). Best of luck.