How to write invoices

[rostraqueen]

I'm writing my first invoice for freelance technical work in a venue. I can't find any info on the internet about how to write one that isn't for products that you are selling! Perhaps someone could tell me what exactly needs to go on it and if there is anything specific to working in live venues that I need to put on?

 

I'd be very grateful!

[Ali2580]

I've written a couple before for providing freelance services. All I have ever included has been the days/times of work undertaken, total number of hours and the rate of pay so that the client knows how the total cost has come about rather than just giving a total and not explaining where it has come from.

 

This has worked with me for a few jobs and haven't needed anything else.

 

2p.

 

Hope this helps.

 

Ali

[paulears]

You need to be very careful how an invoice is set out - because if you get it wrong, then you might be classed as an employee - get tax deducted , National Insurance deducted, and completely mess up your freelance status.

 

The key area is if you are charging for set hours at set rates. If you follow the test on the HMRC website, you'll see that this can become tricky. In fact, not all work areas have this problem, some seem able to invoice for hours with no problem - plumbers are a good example.

 

What I've always been advised to do by my accountant is charge per job. It doesn't matter if the job is a few hours or a few months - the invoice wording just stays the same.

 

Something on the lines of:

Technical services for show 21/6/2010 12pm call. £XXX

 

or

 

Get-in, rig, technical services for show, get-out 20/6/2010 10am call. £XXX

 

Why would you want to explain it as an hourly rate? If the person you do the work for wishes you to do this, then you're en employee, not a contractor/freelancer.

 

In most cases, you'll have agreed the price for the job with the client. If they wish to pay you based on a set hourly rate, then you shouldn't need to invoice them at all.

[Tom]

Lay it out as you would a letter:

 

Your name and address at the top.

 

The company's Name and address (and possibly your contact name)

The date

The word: INVOICE

A Purchase Order or other reference number if they gave you one.

 

The date you worked

A brief description of what you did (e.g.Get Out Crew) - include the name of the show if you know it, helps with tallying everything up.

How much the invoice is for (you can show your workings or just state an amount - I suspect for this sort of job they've told you how much to invoice for anyway)

 

You bank Details, if that's how you want then to pay you.

 

They may ask for a Tax reference, or a statement that you are responsible for your own tax and NI, or they may not. (you are responsible for your own tax and NI aren't you?)

 

Sign it.

 

You can add statements about how soon you want to be paid, or what you'll do if they don't pay you but frankly I would't bother. It will make little difference to how quickly they process your invoice and I suspect your rights are the same whether you put something or don't.

 

There are Excel and word templates for "services" invoices which you can use - google for them.

 

T

[J Pearce]

It should have your contact details, the clients contact details, your charges (labour, parts, expenses, subhires/subcontracts) and your bank details for BACS payments.

 

There shouldn't be much difference between retail and freelance invoices, your service is a commodity just like an orange or a washing machine. If you want to break down costs then consider that you cost £x per day/hour/week, define that as a line on the invoice with quantity being that quantity of days/hours/weeks.

 

Personally I just have lines for labour, hires and subhires; I don't break my labour charges into hours as I quote £x for the job.

 

[edit]

Beaten to it by far more knowledgeable people

[Tom]

My post crossed with Paul's.

 

In my humble opinion, there are very few jobbing crew who are really (under the strict interpretation of the HMRC rules) self employed. Companies should be deducting Tax and NI- and adding Holiday Pay. But few do and that suits most people. And I'm not sure that HMRC are going to be fooled by the wording of an invoice.

 

Also, if I call out a freelance plumber, he'll charge me by the hour but I'm certainly not employing him (from a Tax and NI POV).

 

There may be more specialist production staff who come closer to being Self Employed, though many would still fail the test, but I wouldn't expect to be paying them on an hourly rate, more likely a daily rate or a project fee.

 

As an aside - when I was last filling out a Self Assessment form I noticed that it seemed that if you were employed by lots of people on a casual basis you could claim for travel to you place of work, and there also a provision to claim for work clothes.

[ramdram]

FWIW and allied to the topic, when you become self employed make sure/try to have at least 3 or 4 different clients. The guy I had to see when I set up as self employed a few years back dropped the hint that IF you appeared to have only one client then IR might suspect you were not really self employed at all, if you follow?

 

Probably your best option is to take advice on setting up a business with the relevant authorities and advisory bodies:

 

http://www.bytestart.co.uk/content/19/19_1...oyed-tips.shtml

 

or:

 

http://www.hmrc.gov.uk/selfemployed/

 

This is not a case of teaching you in particular to suck eggs but others who read the forum in UK may, possibly, find it useful to refer to those sites.

 

You might also consider, rpt, consider, items such as Personal Liability Ins, VAT etc.

 

Hope that helps as an adjunct to your original question.

[rostraqueen]

Well, thank you all so much for your advice!

 

As I am a student most of my technical work is voluntary, but this is my first paid venue work. So, I'm not earning enough over the year yet to be taxed. It's a venue I've done tons of tech work for voluntarily before and they told me how much they would pay me per hour, but they didn't know how long the events would last. I will invoice for the rate they said.

They have asked me for an invoice simply for them to keep in their finance records (which they asked me to email to them if possible).

 

At the moment then, I'm not too worried about Personal Liability and tax etc etc, but I'm sure this info will come in handy in the future, so thanks again for all your help. Hopefully other people will benefit from reading these posts too!

[gareth]

All I have ever included has been the days/times of work undertaken, total number of hours and the rate of pay so that the client knows how the total cost has come about rather than just giving a total and not explaining where it has come from.

I'm afraid this is bad advice. If you're invoicing as a genuine self-employed freelancer you should certainly not break your invoice down into number of hours worked and hourly rate - that would put you in a position where HMR&C would start classing you as an employee, which completely moves the goalposts.

[Ali2580]

All I have ever included has been the days/times of work undertaken, total number of hours and the rate of pay so that the client knows how the total cost has come about rather than just giving a total and not explaining where it has come from.

I'm afraid this is bad advice. If you're invoicing as a genuine self-employed freelancer you should certainly not break your invoice down into number of hours worked and hourly rate - that would put you in a position where HMR&C would start classing you as an employee, which completely moves the goalposts.

 

It wasn't as a fully self-employed freelancer just so you know. It was mainly for a company to keep track of their records so they asked for an invoice that's all. I was just giving the OP some basic idea's to start with until the experienced ones arrived! :)

[zonino]

you can find templates here: http://www.bbc.co.uk/supplying/freelancers/

[kerry davies]

Oh dear, Rostra and Ali. They haven't asked for an invoice simply to keep their own records straight. They will also keep it for seven years in case they are tax audited by HMRC, so it might be wise to get a little more serious about business before you do much more.

They are, I believe, treating Rostra as an employee and are actually avoiding their liabilities if they tell you how much they will pay per hour, when and where you will work, you only supply your labour and then they don't sort out NI, tax and holiday pay etc. I have worked for colleges on a similar basis and been PAYE for that element of my self-employed work, you can be both PAYE and self-assessed simultaneously. I have been for 15 years now.

 

A lot of people on the forum seem to think it is just a matter of getting in the money but the legal aspects alone are huge and complicated. For instance, as an employer have you ensured that your one and only employee (yourself) has undergone H&S training? It is a legal requirement. It is important to get PL insurance and possibly Employers Liability, if you instruct someone else in carrying out their work. Do you ever give advice and do you need Indemnity Insurance? etc. etc.

 

I don't think that anyone else has mentioned that you should keep a copy for your own records, get yourself a UTR number (Unique Tax Reference) and stop using the word freelance and use self-employed contractor instead. Sort out your National Insurance and make sure that any vehicle insurance you hold includes work.

Doing work on a "freelance" basis is a business in itself and there is a bit more to running any business, no matter how small, than simply being paid. As someone presumably studying to go into self-employed work Rostra's educational establishment should teach this stuff but I gave up on expecting common sense from academia some years back.

[gareth]

Ali, rather than giving "basic ideas" which turn out to be wrong and misleading, it would be far better to leave it to "the experienced ones" to post advice on matters which may well have an effect on the financial affairs of anyone who heeds that advice.

 

Regarding being "not a fully self-employed freelancer" - you're either self-employed or you're not. Google for IR35 to find out how to tell the difference. I suspect that, seeing as you're still a student, the company saw you as a part-time or casual employee, deducting NI (and tax if applicable) at source.

[Jivemaster]

The whole issue of self employed contractor or employee, has MANY pros and cons. Also there are several tests for either defined status by HMRC.

 

An invioce with hours detailed and a rate specified will almost always make you an employee albeit a casual with irregular hours the employer should account for tax and NI deductions and cover all PPE and insurance needs

 

An invioce specifying a task to a date is more likely to be a self employed contractor invoice. You contract to do a task by a deadline date. You need to have insurance for what you do, and check that your vehicle is insured for business use.

 

If you don't have a tax reference and a NI reference then you cannot be self employed without getting them.

 

ONLY in my opinion consider the lack of costs (accountant, insurance etc) of being a casual employee, as plus factors. When you are established and trusted in your locality and have some regular work available, then talk about fully compliant self employment.

[David Lee]

At the moment then, I'm not too worried about Personal Liability and tax etc etc, but I'm sure this info will come in handy in the future, so thanks again for all your help. Hopefully other people will benefit from reading these posts too!

 

God that scares me so much that line. The innocence of youth eh :blink:

 

IMHO you should be classed as a employee from what you have said (albeit on a casual basis).

 

If you do become Self Employed you should definately declare income, it doesn't matter if it is below the tax thresholds. If HMRC find out you have been invoicing jobs and not declaring them they won't be happy chappies. As to getting an accountant - you should certainly seek advice if you are intending to go Self Employed but the tax returns for this level are very easy (fill in the simple form if your earnings are below £xx amount)

 

PLI - get it if you are Self Employed - before you start "freelancing". I have heard other Self Employed techs saying "Oh the production companies PLI covers me." They will be in for a great shock if the worst happens.

 

Just my 2p as I have learnt all this the hard way