Do I really have to register as a sole trader for a one off freelance job worth £100?

bananapancake_2

I do apologise if this is a stupid question and/or if this is in the wrong section of the forum!

I work full-time for a company as a designer and recently did a bit of extra/freelance design work for a family member's business. It was my intention for it to be a favour but she is insisting on paying me.

We settled on a fee of £100 and she is now requesting that I provide her with a "registered invoice" so that her accountant can charge it to her business account. She says there is a database of self-employed people that her accountant would cross reference.

My questions are:

a) Is this true? I have found no evidence of such a database.
b) I have no intention currently of doing any more paid work outside of my day job. And if I ever do and start to make some significant profit can't I simply register then?

I'm naive and ignorant when it comes to this sort of thing but it seems ridiculous to me to have to register and fill out a tax return for a single, one off £100 job.

I have read conflicting advice on this so I'm hoping I could get a definitive answer here.

Thanks in advance!!:o

Dazed_and_confused

bananapancake wrote: »

I do apologise if this is a stupid question and/or if this is in the wrong section of the forum!

I work full-time for a company as a designer and recently did a bit of extra/freelance design work for a family member's business. It was my intention for it to be a favour but she is insisting on paying me.

We settled on a fee of £100 and she is now requesting that I provide her with a "registered invoice" so that her accountant can charge it to her business account. She says there is a database of self-employed people that her accountant would cross reference.

My questions are:

a) Is this true? I have found no evidence of such a database.
b) I have no intention currently of doing any more paid work outside of my day job. And if I ever do and start to make some significant profit can't I simply register then?

I'm naive and ignorant when it comes to this sort of thing but it seems ridiculous to me to have to register and fill out a tax return for a single, one off £100 job.

I have read conflicting advice on this so I'm hoping I could get a definitive answer here.

Thanks in advance!!:o

No idea about the database but it's probably not unreasonable to require some sort of evidence of the payment for the accountant/hmrc.

If this was genuinely a one-off then you have no need to complete a tax return. You just need to phone HMRC give them details of the amount of extra income and the tax year you received it in and make it crystal clear it was a one-off and you have no expectation of receiving any more "freelance" income.

If you received the income this year (2016:17) HMRC can just adjust your tax code so the extra tax due (between £0 and £45 depending on what your full time job pays) is collected during the rest of this tax year.

If you received it last year (2015:16) then you could get a tax calculation showing the extra tax due and this will normally be collected by an amendment to your tax code next year (2017:18) and there should be no impact on this years tax code.

Gov.uk specifies https://www.gov.uk/income-tax/how-you-pay-income-tax
Income that’s not automatically taxed
Income Tax is no longer automatically taken from interest on savings and investments.

You must fill in a tax return if your untaxed income is over £2,500, or if you don’t pay tax through your wages or pension. You must contact the Income Tax helpline if it’s less than £2,500.

HappyMJ

bananapancake wrote: »

I do apologise if this is a stupid question and/or if this is in the wrong section of the forum!

I work full-time for a company as a designer and recently did a bit of extra/freelance design work for a family member's business. It was my intention for it to be a favour but she is insisting on paying me.

We settled on a fee of £100 and she is now requesting that I provide her with a "registered invoice" so that her accountant can charge it to her business account. She says there is a database of self-employed people that her accountant would cross reference.

My questions are:

a) Is this true? I have found no evidence of such a database.
b) I have no intention currently of doing any more paid work outside of my day job. And if I ever do and start to make some significant profit can't I simply register then?

I'm naive and ignorant when it comes to this sort of thing but it seems ridiculous to me to have to register and fill out a tax return for a single, one off £100 job.

I have read conflicting advice on this so I'm hoping I could get a definitive answer here.

Thanks in advance!!:o

A database of self employed people....

I don't know of any database. I am a company director and the company I own employs me. Anyone can see the public information regarding the company and they can see I am a director of the company that I own....

As a sole trader. I don't think so.

You do need to create an invoice and you can use a word processor to do that. It's very easy. You put your trading name on the invoice which would be your own name, the amount you are billing and write on it a method of payment such as direct bank transfer.

As previous email states you just ring HMRC and advise them of "other income" you have received that has not been taxed and they'll adjust your tax code accordingly.

bananapancake_2

thank you both so much for clearing that up!

glider3560

I have a small online hobby which resulted in me being self employed. In the few cases where someone actually wants an invoice, I just send them something like this:

Mr My Name t/a Business Trading Name
Address
Postcode
United Kingdom

INVOICE

Number: N
Date: 02/07/2016
Customer's Ref (if applicable): xxxx

To:
Customer's Name and Address

Description of service rendered £xx.xx

Total £xx.xx

Payment by BACS received on 02/07/2016 £xx.xx
Balance outstanding £0.00

I've got a Excel sheet that produces these based on the very basic accounts I keep. Previously just knocked them together in Word. Never had any complaints from accountants or customers.

lisa110rry

I would just add to Glider's template invoice that terms 'payment within 14 days in accordance with our agreement dated... Or whatever) and BACS details would also be good to add.

Discodave

you can declare any one-off freelance jobs to HMRC on 0300 200 3300 (PAYE Helpline). They will record the gross figure of £100 within the revelant tax year (15/16, 16/17 for example!). You will then pay the next whenever that comes around.

You only need to declare Self-Employment (SEMP) if you're gonna be contiously working for yourself as well as your Employer

PS: if ya fancy doing some free logo work for me, give me a shout! lol