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Where Taxpayers and Advisers Meet

Invoicing???

mark7022
Posts:1
Joined:Thu Aug 11, 2016 12:18 pm
Invoicing???

Postby mark7022 » Thu Aug 11, 2016 1:08 pm

Hi,
I have taken early retirement / voluntary redundancy and my pension will be circa £800.00 per month.
I have also taken on a consultancy job, which will pay around £12,000.00.
What will the tax implications be? Will the 12k move me into a new tax bracket? If so, should I adjust my invoice to take this into account?
I have no company name so how do I invoice properly? Do I need to add VAT, even though I am not VAT registered. Do I need to register for VAT?
Do I need to start up a company to invoice correctly?
Many thanks for your help and advice
Mark

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Invoicing???

Postby LozaACCS » Fri Aug 12, 2016 8:38 am

You ask a number of questions which suggest that you would benefit from instructing a local adviser.
The combined income will not make you a higher rate taxpayer.
You need to consider the engagement to determine whether you are employed or self employed, HMRC have a status indicator tool which you might find helpful.
If you are employed then VAT is outside the scope.
If you are not an employee then you can by choice either register as self employed or form a limited company and trade through that vehicle, in either case there is no obligation to register for VAT until your taxable turnover on an annual basis reaches the threshold (currently 83K)

eionmac
Posts:3
Joined:Sat May 23, 2009 5:31 pm

Re: Invoicing???

Postby eionmac » Thu Sep 01, 2016 4:39 pm

There is a major risk factor to take into account. If you trade as "self employed", your entire assets are at risk if you make a mistake where a claim can be made against you. If you trade as a Limited Company , you remove your house and assets other than those belonging to the company from any such claim, and you should get appropriate insurance. You invoicing is well below VAT level, but some clients may require you to register for VAT so they are trading with a known UK VAT Limited Company. This means you register voluntarily and charge your customer VAT and pay that VAST to HMRC VAT . Your net income is not effected. (less costs of running the company and insurance which is a few hundred pounds per year provided you are not in 'manual; labour' supply or working in high risk trade Butcher, Offshore Labour etc.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Invoicing???

Postby bd6759 » Thu Sep 01, 2016 7:00 pm

Forming a company for income of 12,000 per year is not worthwhile. It is likely to open up a can of worm of regulations that would quickly eat into his profits. If he needs indemnity, a personal insurance policy will suffice.
As Loza said, a chat with a local advisor will give him proper tailored advice.


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