How do i create an invoice to be payed?

caprikid1

"Without wanting to worry you further, this is sounding increasingly like disguised employment, where the employer saves on NI, but where the contractor can become liable if HMRC investigate. Do you have a clearly defined statement of what you are delivering in the contract?

(read into IR35 if you want to get technical)."

There is an easy test to do , just go online to do the governments IR35 test.

Check employment status for tax - GOV.UK

If it's only one month not sure how this can be considered to be a disguised employment.

Send them an invoice, get paid and then make sure you are registered for self assessment, you will need to submit a tax return for this by Jan 2027 as this falls in the 25 - 2026 tax year.

You should look to speak to an accountant and consider whether a LTD company is a more suitable vehicle to engage via.

If you continue with this company or another then you will need to speak to an accountant and get this all sorted correctly.

Caz3121

faringdon said:

N0 i havent registered as self employed. I dont know how to do that.
So are you saying i will not be payed?, because i dont have the means to do an invoice?, ie, i am not a limited company or something?

to register with HMRC - https://www.gov.uk/become-sole-trader/register-sole-trader

to create and invoice you just need some software - Word / Excel etc 
free templates available online eg https://www.simplybusiness.co.uk/wp-content/uploads/sites/3/2024/05/sole-trader-invoice.pdf

As per your agreement. They want you to issue an invoice (bill for your time) and then they will settle that bill.

I work as a self employed consultant for a few clients, I do not have a limited company. I issue each client an invoice at the end of the month with my details - UTR ref, address, bank details. and I complete a self assessment each year to pay my tax and NI.

sgthammer

You don't need a limited company or expensive software to generate an invoice. It's just any document that clearly identifies WHO the client is paying FOR WHAT and HOW. A letter or an email will do.

Stick your name and address at the top.

Give it an invoice number in case you need to keep track later.

Today's Date.

SERVICES RENDERED (can be a detailed list or literally just "XX days consultancy")      £PRICE

EXPENSES (if your contract lets you you claim these separately)                                     £PRICE

Please pay by [date] or Please pay within 30 days

to A/C xx-xx-xx/xxxxxxxx

Being hired as a consultant rather than being taken on through PAYE means you, not the company, are on the hook for NI contributions, public liability insurance etc. It's a perfectly legitimate way to operate if you're an actor or a plumber going from job to job, but if it becomes an ongoing thing where they're your only client, then Mr Taxman will often come a-knocking at some point down the line. Others can tell you more about that than I can, but just be careful.

MeteredOut

caprikid1 said:

"Without wanting to worry you further, this is sounding increasingly like disguised employment, where the employer saves on NI, but where the contractor can become liable if HMRC investigate. Do you have a clearly defined statement of what you are delivering in the contract?

(read into IR35 if you want to get technical)."

There is an easy test to do , just go online to do the governments IR35 test.

Check employment status for tax - GOV.UK

If it's only one month not sure how this can be considered to be a disguised employment.

Send them an invoice, get paid and then make sure you are registered for self assessment, you will need to submit a tax return for this by Jan 2027 as this falls in the 25 - 2026 tax year.

You should look to speak to an accountant and consider whether a LTD company is a more suitable vehicle to engage via.

If you continue with this company or another then you will need to speak to an accountant and get this all sorted correctly.

From the first post

"I thought they were taking me on PAYE on £60,000/year "pro rata", ie, they just keep paying me till they dont  want to employ me any more."

Do you still think it's not disguised employment? The OP thinks there were being employed!

But, being self-employed (once they register) rather than via a PSC might mean they're ok.

sgthammer raises a good point about insurances too. Is the OP aware that any negligence on their part when performing the consultancy leaves them open to be personally liable for any losses incurred by the "employer". OP, what kind of work are you doing for this company?

LITRG

Hi faringdon, you might like to read our guide which pretty much covers all the strands to your query: https://www.litrg.org.uk/working/self-employment/self-employment-guide. Good luck! 

Savvy_Sue

LITRG said:

Hi faringdon, you might like to read our guide which pretty much covers all the strands to your query: https://www.litrg.org.uk/working/self-employment/self-employment-guide. Good luck! 

And if you cannot follow that guide, you cannot afford NOT to see an accountant...

Uriziel

I would definitely start asking them whether you're an employee or not before you wonder how you can raise an invoice.
You might think that you are being paid £60k but once you deduct VAT, since invoices for services need to have 20% VAT, and you also pay income tax, etc. how much of that £60k will be left? A lot less. You need to let HMRC know that you need a VAT number.

QrizB

Uriziel said:

You might think that you are being paid £60k but once you deduct VAT, since invoices for services need to have 20% VAT,

There's no apparent need for OP to register for VAT, so I don't quite follow you on this point. (If they did register for VAT they'd be adding that on top, per the contract terms.)

Otherwise I agree, £5k pm as a self-employed contractor is worth quite a bit less than £5k pm as PAYE. No pension, no annual leave entitlement, no SSP and so on.

Caz3121

Uriziel said:

I would definitely start asking them whether you're an employee or not before you wonder how you can raise an invoice.
You might think that you are being paid £60k but once you deduct VAT, since invoices for services need to have 20% VAT, and you also pay income tax, etc. how much of that £60k will be left? A lot less. You need to let HMRC know that you need a VAT number.

unless OP will have a turnover in excess of £90k per annum there is no need to register for VAT. (https://www.gov.uk/register-for-vat)
IF they did register then they would be raising an invoice for £5k + £1k VAT (as the agreement says the £5k is exclusive of any VAT that may apply)

Mands

Uriziel said:

You need to let HMRC know that you need a VAT number.

His *company* would need a VAT number. But he hasn't created a limited company.