UK Freelance advice
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- ********
Just wanted some advice to start freelancing.
I have just had a kid so I am thinking of taking a couple of small design jobs on the side for a bit of extra cash and wondered what i needed to do to keep the government happy.
If I can get new equipment (eg desperately in need of a new machine) vat free like business do.
Government websites are confusing as hell, so I thought it would be better coming from the horses mouth.
It won,t be a massive operation as I don't want it to affect my current employment.
Any advice is much appreciated and hopefully may help other people starting up.
Cheers!!
- mydo0
as a freelancer you won't be vat registered so you can't claim anything vat free.
freelancing is a lovely tax dodge anyway (apparently). enjoy.
- Terminal270
Yes you can't claim anything... but register as a sole trader too and anything you buy for your work can be deducted from your tax at the end of the year.
- jamble0
You've probably got two reallistic options:
1. Register with HMRC as self employed
2. Form a limited companyYou can do both while working full time and if you send them a P60 (I think) that tells them that your full time job is your main source of income.
You'll end up getting hit for more tax if you're registered self employed and beware your first year tax return because they'll hit you for a payment on account (http://www.hmrc.gov.uk/MANUALS... which is a real bastard.
If you're registered as a limited company, you'll have to pay corporation tax but it works out better.
My best advice is to get in touch with a qualified accountant to figure out the best way to go in terms of setting up. It might cost you a little bit but there's no substitute for the advice.
- MSL0
As a sole trader you are personally responsible for any debts run up by your business, which could mean that your home or other assets are at risk. A limited company status offers protection of your assets should you get into financial trouble.
Speak to a good reputable accountant and they will explain the benefits of both in much more detail (including paying dividends instead of wages).
- raf0
Limited company usually requires costlier accounting, might not make sense if it's just some extra work every now and then.
- Dancer0
Hello ablessing.
I am assuming you are already paid through PAYE as a fulltime employee elsewhere.
There are a few factors that need to be considered here.
At your current job are you contractually obliged to only your employer? If they find out you could be up for a wrist slap. If you are happy to take the risk, and most, if not all, designers do! then you have to think how much you will earn on a freelance basis.Tax:
If it is just the odd job then I would not worry too much about the tax man. You can earn almost almost £4.7k/year before you have to claim anything. But I imagine your PAYE takes up that entitlement.NI:
You will only have to pay this if you register as a soletrader. Which I doubt you need to.VAT:
You CAN register but I do not see the point as it just involves more paper work and you are not selling products therefore it is not that beneficial to you. If you earn over £60k however, it is mandatory to register for VAT.Good luck
- mydo0
couldn't write it any better.....
http://www.bytestart.co.uk/conte…
- mydo0
alternatively, go on lot's of holidays, say you did the work on holiday. money you earn abroad isn't taxable in the UK.
- You sure... hasn't Lord Ashdown (on the news) just been done for this?Dancer
- you're not allowed to bring it home though.mydo
- Sorry if you live and work in the uk its taxable wherever its done....if u tell them that is!HomeCreative
- That's pretty good. I wonder if that works from US to abroad... wait why am i on this thread, this doesnt apply to me at allFlanels05
- Dancer0
To follow up on Jamble.
Yes you have to pay on account if you are a registered as a soletrader, which is a real bitch. But it is for more than the first year... I have been doing it for about 4 years now so I am used to it.
- ********0
Thanks for all this great advice! Going to research over the weekend and see if I can get in contact with an accountant.
- johnnnnyh0
You can register for VAT but you will need to charge VAT on your services. If you work B2B this is fine as they will most likely simply claim the VAT back. If you work for people who are not VAT registered like smaller companies or small start ups then the VAT becomes an additional cost for them and might not make you as competitive. You can adjust your prices accordingly but that would mean you would make less money.
Once VAT registered you can claim the VAT back on purchases for business use as long as you get a VAT receipt. More paper work with VAT since you need to do a return every three months which is a calculation of what VAT you charged less the VAT you spent out on. The balance is what you owe Alistar Darling. It rarely works that you claim more than you bring in unless you are starting up or things are going really slowly.Ltd company will most likely mean you will need to use an accountant to compile your company accounts. It's tax efficient to a degree but you probably won't be setting up offshore Cayman island accounts with the difference.
Some companies prefer to deal with a LTD company for example government contracts tend to not want to deal with a sole trader. Ltd makes you look like a company where as sole trader can pigeon hole you into freelancer which can turn you into bloke in bedroom which means people think you live on fresh air.
Keep in mind it's a business what ever you call yourself. You need to make a profit otherwise it's called a hobby.
- ********0
Thats kind of what I want though I have a really good job, I was just wanting to take 2 - 3 jobs on the side
- chrisRG0
I was about to ask almost the same question.
I'm moving to London and I'm going Freelance. I'll get jobs from the company I'm leaving here in Sao Paulo, it's not big money but it is a montly transfer to my UK Bank Account. So 2 questions:
1) will I need to pay taxes on this? I'll pay Brazilian taxes yet.
2) What's my best choice and what will I need to start freelancing in uk?I know the answer can be complex, but I'd appreciate any help.
- breadlegz0
My 2 cents would be to get a good accountant and let him/her deal with all that while you get on with creating and producing in the short amount of time you have.
- +1
this is the best route and u will save more money than u think as they know little ways round things to claim forWeLoveNoise - things to claim for that u prob wouldnt know yourselfWeLoveNoise
- +1