Doing Freelance Work - Legal Implications

keithmdw

I am currently full-time employed but have had the offer of some on-going web development work which I could do in my spare time.

I would effectively be a sub-contractor of the company - I would do the ork
for them and send them an invoice.

What is the legal situation? Do I have to notify the tax man as my earnings from this freelance work would I assume need taxing, and how would that affect my current full-time job (I assume it wouldn't).

Also, do I need to actually set up a company or anything in order to do this or can I just do it as an individual person? If this company needs me to send an invoice before they pay me for freelance work, could I send an iinvoice with just my name on the top of does it need to be a fully operational company? What about VAT? His company is registered for VAT, does that mean I need to?

The mortgage on the house (as most) also prohibits running a business from the premises. Would freelance low-level web design count as a business?

Sorry if these are basic questions but I have no idea - I want to do it right and not fall foul of the tax man or any other legal body.

I want to do it in the way that is the least hassle (if there is one).

If it's too much hassle or problematic I will probably just turn the work down, but I want to try and do it if possible as it may lead to other things in the future - you never know.

Thank you in advance

spendaholic

First off you need to check your contract of employment as some organisations, notably local authorities, still claim that any work you do outside the company is moonlighting and you should hand over any earnings to them - or at least notify them. Very outdated, I know, and I was shocked to see some contracts still saying this. But worth checking all the same.

You don't need to set up a business account or a business, unless you intend to leave the day job and make a go of it all full time. A separate bank account is sufficient (and I checked this with my own bank), as you can always say your business account is elsewhere. But the separate bank account isn't necessary. I have 2 for convenience.

You should notify your local tax office so that they can send you a tax return at the end of the financial year. Then you can opt to pay any additional income tax by cheque, or have it added to your tax code at work.

Most mortgage companies are content that you simply notify them that your premesis won't be getting used as a business, i.e. with loads of people tramping around or lots of deliveries. But be careful about allocating a whole room to your new business. Try to set up office in a bedroom, a lounge, or even a laundry room.

Finally, don't forget to list all expenses to do with this extra work. A percentage of your car, electricity, gas, water rates, local rates, telephone, anything you buy, as this can be deducted from your income for tax purposes.

Good luck!

Unbelievable_2

You will find some helpful info here.

Some of it will not apply but you need to read the bit about national insurance contributions (you need to register as self employed within 3 months of starting work). HTH.