How do i create an invoice to be payed?

monkey-fingers

Just as an aside, it's paid, not payed.

I know this is being petty, but you might not want that on an invoice.

Grumpy_chap

This thread is a bit confusing, both from the OP and, perhaps consequently, some of the responses.

The OP initially though they had a regular PAYE job at £60k per year.

The contract then indicated that the OP is engaged by the company as a Consultant at £5k per month (+VAT if appropriate).

There are mentions of setting up a Ltd Co., and also comments about IR 35.
If the contract has been issued by the company to "OP", then that is on the basis that "OP" is a sole-trader.
If the contract has been issued by the company to "OP Ltd" then that is on the basis that the Op is owner-director of their own Ltd Co.

The Op needs to raise the invoice from whoever the contract has been made out to.  Given the Op says they do not have a Ltd Co., then that must be "OP" (sole-trader).

IR35 will not apply if Op is sole-trader as there is no intermediary.

The current work needs to be done and the Op needs to invoice that on the basis the contract has been set up.  The Op will need to register for sole-trader and keep money back to pay necessary income tax and NI.  

Going forward, the OP may wish to consider Ltd Co., and also whether registering for VAT is advantageous.
An understanding of rate would also be worthwhile as £60k PAYE does not equate to £5k per month sole-trader.

General_Grant

Mands said:

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.

If self-employed he doesn't have a "company" - though he could trade under a name different from his own.  He doesn't need to let HMRC know that he needs a VAT number - if he registers for VAT he will receive a number (which would need to be quoted on all his invoices).

faringdon

Thanks, so i see that i need to send them an invoice.

Sorry its a bit confusing...all i did was respond to a job ad on indeed.co.uk.

Went in for the interview, boss  wanted me to say exactly how long the job would take, but i couldn't say, so i just asked to go on £60k/annum on a pro-rata basis and they just get rid of me when job is done.

Then i eventually read the contract, and it said i was contracted for one month.

Must admit i dont know what a "UTR" is, which i will need to put on the invoice.

It seems that people think the best "box" to put myself in is "sole trader"?

When ive been a contractor before, the recruitment consultancy always sorted it, or indeed, whichever  company actually took me on a kind of "fake" PAYE employment basis, knowing full well that i would be terminated as soon as the job was done.

Ive really no idea about Tax/Inland Revenue, Ltd company, Sole Trader,  etc etc

Must admit paying £100's for an accountant doesnt sound great at the moment.....if i can build up some more money then it sounds better. Work can get scarce at the moment, due to the Ukraine war......due to my age i am not favoured for military contracts as my age makes it hard for them to get Security Clearance for me  at the moment.

twopenny

Creating an invoice is quite easy as long as you include the essentials that Hammer said on page 2.
Look online or if you have contact with anyone self employed like a trade they might advise what one should look like for the price of a pint.

I've done it myself for a National organisation and we had a bit of a barney about my delayed payment so I made the invoice extra large so they couldn't ignore it. Childish, but satisfying 😉

What does concern me is if you take more than one random job like this you could get in a sticky mess with National insurance and tax. One probably won't matter but more you are looking at problems further down the line.

This new company has a cheek to employ you only to solve a problem for them and not deal with tax and NI. You might be able to include that in your invoice if it's not stipulated otherwise in the 'contract'

QrizB

faringdon said:

Must admit i dont know what a "UTR" is, which i will need to put on the invoice.

Your Unique Taxpayer Reference. HMRC will issue you one once you tell them you're self-employed and register for Self Assessment.

https://www.gov.uk/find-utr-number

caprikid1

"IR35 will not apply if Op is sole-trader as there is no intermediary."

I am not convinced the lack of intermediary means IR35 does not apply, this feels potentially like normal employment for tax purposes and the OP will need to complete the assessment link.

Peter999_2

Don't forget that it is now the responsibility of the employing company as to whether the role is within or out of IR35 which takes away the risk from the contractor.      They did this at the bank I worked for - so they immediately declared that all contracting jobs were within IR35.

MeteredOut

Peter999_2 said:

Don't forget that it is now the responsibility of the employing company as to whether the role is within or out of IR35 which takes away the risk from the contractor.      They did this at the bank I worked for - so they immediately declared that all contracting jobs were within IR35.

It's been a while since I had to fully understand IR35, but I'd caution on two points on the above

The "employing company" (client) determining whether a role is within IR35 does not "take away the risk from the contractor". If a wrong decision is made (in the eyes of HMRC), the contractor could still be liable.

if the client is small (as defined by Companies Act 2006) then it is the PSC who is responsible for making the determination. Though some small companies may still decide to make a determination.

I agree with a previous post that IR35 applies to work through an intermediary (such as a PSC) so will likely not impact the OP, but that is separate to whether they are a disguised employee. Such a scenario is more likely to impact the client rather than the contractor though were that found to be the case by HMRC.

Peter999_2

MeteredOut said:

Peter999_2 said:

Don't forget that it is now the responsibility of the employing company as to whether the role is within or out of IR35 which takes away the risk from the contractor.      They did this at the bank I worked for - so they immediately declared that all contracting jobs were within IR35.

It's been a while since I had to fully understand IR35, but I'd caution on two points on the above

The "employing company" (client) determining whether a role is within IR35 does not "take away the risk from the contractor". If a wrong decision is made (in the eyes of HMRC), the contractor could still be liable.

if the client is small (as defined by Companies Act 2006) then it is the PSC who is responsible for making the determination. Though some small companies may still decide to make a determination.

I agree with a previous post that IR35 applies to work through an intermediary (such as a PSC) so will likely not impact the OP, but that is separate to whether they are a disguised employee. Such a scenario is more likely to impact the client rather than the contractor though were that found to be the case by HMRC.

Thanks for this.  I didn't know that - I've only done contracting for very large companies and they have made the decision since about 2018/2019 or somewhere thereabouts.    I contracted for about 10 years before that and I've had no comeback yet to say I was within IR35 but I was very careful to ensure that I was.   The HMRC checker agreed I wasn't for various reasons but apparently that is not reliable either.

I have known contracters who have been investigated re IR35 but every one of them won when it got to court.   The only contracters I knew who got heavily punished were ones that sent their earnings off-shore and paid themselves loans through their LTD company and avoided paying tax.
I always made sure I paid my tax and NI, both corporation and personal.   To be honest I was only a contractor as that was the only job you could get in IT banking for quite a while - I eventually became a permie instead (which is what I wanted all along, haha).