Tax implications of completing freelance work during redundancy notice period, sole trader set-up

mbRose

Hi hoping you can help.

I was made redundant on 21st Aug with a notice period of 1 month which was complete by the 21st September.

I was lucky enough to secure a freelance contract very quickly which I started work on at the beginning of September and have done 1 months work  (112 hrs) which I now need to invoice for.

To do this I need to register as a sole trader with a start date for my freelance business. I am wondering what the tax implications are for the three week period that I was doing freelance work during my notice period?

I know commencing employment usually cuts short a notice period but I have received my complete redundancy package and will invoice for the work completed up to now on 30th September which is after the notice period finished so is it legitimate for me to just leave it as it is?

What date should I register the business as starting? The invoicing date? the notice period end date, the 1st September?

Many thanks, I can't find much written about my specific situation!

(Ps. I am based in Scotland if it makes any difference.)

General_Grant

mbRose said:

Hi hoping you can help.

I was made redundant on 21st Aug with a notice period of 1 month which was complete by the 21st September.

I was lucky enough to secure a freelance contract very quickly which I started work on at the beginning of September and have done 1 months work  (112 hrs) which I now need to invoice for.

To do this I need to register as a sole trader with a start date for my freelance business. I am wondering what the tax implications are for the three week period that I was doing freelance work during my notice period?

I know commencing employment usually cuts short a notice period but I have received my complete redundancy package and will invoice for the work completed up to now on 30th September which is after the notice period finished so is it legitimate for me to just leave it as it is?

What date should I register the business as starting? The invoicing date? the notice period end date, the 1st September?

Many thanks, I can't find much written about my specific situation!

(Ps. I am based in Scotland if it makes any difference.)

You can be self-employed and employed at the same time.  So, with HMRC, you can use the start date for your self-employment as whatever date you started the work (or began looking for it).

I don't understand your statement about starting employment cutting short a notice period.  Where did you get that idea?

mbRose

Thanks for responding @General_Grant
So working both won't matter then if I can be employed and freelance at the same time.
It seemed a little too good to be true that I will get my full redundancy pay and a months pay for my new freelance role, in effect get paid twice for September, perhaps I've just been lucky? I understood from Citizens Advice website that if you started another job during your notice period normally you'd need your current employer to agree to bringing forward your end date and had assumed that would impact on notice pay, but maybe I misunderstood or this doesn't apply if the work is freelance? 

Thrugelmir

Consider it good fortune that you've immediately generated a new income stream. Though self employment comes with it's own risk and reward. That redundancy money maybe a useful emergency pot. 

mbRose

Thanks, learning on the hoof at the moment