Freelance Expenses & Insurance

[paulears]

I suspect the HMRC, if they were bothered, could make life interesting for many people. However, I suspect what they are doing is putting the onus on the bigger firms to check people out, and minimise the risk to them - as in a sudden demand for the PAYE they should have deducted and the NI - both employee and employer. I had a request earlier in the year for a formal letter from my accountant that confirmed my status. I passed this on, and the next contract just requested me to invoice them for the full contract amount, plus the VAT. A colleague who is 'self-employed' and non-VAT registered has been taken on as an employee by the same company - PAYE based.

 

A person I do things for from time to time, always sends me an email asking for the invoice to contain:

Date

Location

Wages

Subsistence

Travelling @p/pm.

 

I always replace 'wages' with contract fee, as the word wages is not in my business vocabulary.

 

The actual contract is frequently a very informal email - can you do X, on Y, for £Z - I'm happy enough with this.

 

If I understand it, HMRC have a pretty sensible limit for additional income - I believe around £10K, so I suspect that anybody who earns less than ten grand from their so called self-employment gets left alone. No doubt they concentrate on the big boys where mistakes are worth rectifying. I often wonder if they also are less concerned about anyone who has an agent representing them - as in what accountants are, leaving those who do their own tax returns as the ones worthy of a nose around?

[stories]

On a side note, something bugging me today was a job advert for "freelance" sound techs. The description has such phrases as "successful applicant will be answerable to the Head of Sound and the Managing Director " and requires the person to be " available for installations, emergency call outs and routine maintenance."

 

All that sounds like an advert for an employee not looking for contractors.

 

I think, sometimes, employers can either be quite naïve on the tax implications and employment.

 

 

I read the same yesterday, imo it says a lot about the company than anything else..... (ether VERY naive, or just clueless and trying to get around tax/NIC responsibilities, ether way, likely give's an idea of the sort of 'company' you'd be working for if 'you' responded to them and the grief.... No disrespect to the poster as I don't know them, but it is an incredibly bad judgment posting).

 

-s

[mrboo]

All my invoices have a price of the job as agreed with no rate of pay or hours with no breakdown of how I priced job.

As there was a case of a friend who paid for transport and hotel of his dancers ( all was freelance he was a agent) and was pulled in and and was told self employed people pay for there own transport and hotel and he ended up getting a tax and ni bill for about 40 people. So ended up going under he should of invoiced them all.

All my train tickets go in as the tax office cant ask me to list every site meeting or tender as as far as I see it there no legal right for me to name people I have chatted too as there not my customer until job is agreed.

 

 

[paulears]

As I understand it, that is not correct - certainly my tax inspection showed me that genuine business expenses are valid. In the case of paying for other people's hotels, food or other items like travel, there is no rule that specifies these must be only charged by the person who uses them? Indeed, paying for other people's genuine business expenses is done every day. Agents pay for these kind of expenses all the time - and it's a normal feature of how they work. I suspect the example you quoted has a missing element.

 

One project coming up called to arrange flying me to the venue, I had already organised it myself - so either way it's fine - because the actual expenditure is allowable, who claims it is irrelevant.

[GR1]

Self Employed people don't always pay for their own transport and hotel. It depends on the contract. I sometimes put client to provide these in my quote and sometimes I pay for them and invoice for them. Either way is OK as long the paperwork is correct. You can't expect someone from London to book hotels in Japan or The States - it's bonkers. On the other hand if you book your own flights you can be sure of getting where you need to be on time. As Paul says, something is missing, maybe the phrase 'his dancers' is a clue ...

[stories]

All my invoices have a price of the job as agreed with no rate of pay or hours with no breakdown of how I priced job.

As there was a case of a friend who paid for transport and hotel of his dancers ( all was freelance he was a agent) and was pulled in and and was told self employed people pay for there own transport and hotel and he ended up getting a tax and ni bill for about 40 people. So ended up going under he should of invoiced them all.

All my train tickets go in as the tax office cant ask me to list every site meeting or tender as as far as I see it there no legal right for me to name people I have chatted too as there not my customer until job is agreed.

 

Defiantly sounds like some facts are missing, or you friend just didn't fight his corner (I've found you have to do this with the tax man, if your opinions differ, and your sure of your position, as the 'boots on the ground' can be a little clueless at times... and need a more experienced colleague, further up the ladder, to reach the correct conclusion).

 

I can see a good business decision/reason for organizing transport and booking rooms for Sub-contractors. e.g. Not wanting to pay any additional markup, better rate for group booking, or wishing to be able to recover the VAT, where the "sub-contractors" are not VAT registered.

 

If the people were deemed employees it would not be on the sole basis that they didn't pay and bill for the transport and accommodation, there would have been a bigger issue (or multiple smaller issues that added up). e.g. sole employer.

 

My other half is currently looking for part-time work and she recently talked to a small (one man band type) home care agency, I listened in on what the chap had to say, trying not to pi$$ myself laughing! To all intents and purposes what he was proposing was a 0 hours contract/part-time employment, but he was adamant she would have to bill them, organize her own liability insurance, be available when needed and pay her own travel costs etcetc... Basically he was trying to avoid employers responsibility and costs... while putting some of them on the employee and stiffing the tax man. This is when people get burned when the taxman takes a look....

 

Personally I expect my clients to book the accommodation, I don't have time to be sorting that at... not to mention not usually having had enough information to be able to quote accurately for and sort out. Additionally the client, or there end client may get a far better rate as they are booking multiple rooms. Goes back to my above question: Are a lot of us really truly 'self employed' in this industry, with the way we work?

 

-s

[Nick LX]

You are probably self-employed if you:

• run your own business and take responsibility for its success or failure
• have several customers at the same time
• can decide how, when and where you do your work
• are free to hire other people to do the work for you or help you at your own expense
• provide the main items of equipment to do your work

You are probably employed if you:

 

• have to do the work yourself
• work for one person at a time, who is in charge of what you do and takes on the risks of the business
• can be told how, when and where you do your work
• have to work a set amount of hours
• are paid a regular amount according to the hours you work, and get paid for working overtime - even if you do casual or part-time work, you can still be employed

 

 

So from that I'm self-employed. I get phoned up and asked if I want to work on a certain day and it's up to me whether I do or not. I have no set amount of hours although I do get paid an agreed amount.

 

I don't actually work at their warehouse at any point. I think there was a bit of misunderstanding. The work I do (which isn't for WhiteLight) varies from job to job. It is, for the majority of the time, just a single day's of work at a time.

 

E.G. the company I work for will ask whether I want to work on Friday. I'll either say yes or no. If I say yes, I work on Friday at wherever the venue is. Some days I will meet directly at the venue. Some days I will meet at the warehouse to help load the lorry. What I really wanted to know was what I can count as travel expenses if at all possible.

[Brian]

It's very important to note that in the section you quoted, each bullet point should be read as 'AND' not 'OR'. So to be self-employed you should meet all 5 of the bullet points.

[stories]

My thoughts, interested to see what everyone else's thoughts are:

 

 

>You are probably self-employed if you:

>

> run your own business and take responsibility for its success or failure

 

Anyone ether part-time with several companies, or 'self-employed' would fit a yes here... both in charge of finding the jobs or work to do.

 

 

> have several customers at the same time

 

Does this mean working for several companies in the same, say week, as in not continuously working for the same employer all week (or month etc). Or able to move from one job to the next within the same day, or having other people working on several jobs your 'running' concurrently on the same day?

 

> can decide how, when and where you do your work

 

Does this mean saying "yes" or "no" to doing a days work when offered, or deciding when you turn up on site, how long you stay etc?

 

> are free to hire other people to do the work for you or help you at your own expense

 

Most clients I know aren't particularly happy if a freelancer double books and wants to provide a 'stand in' on there behalf and certainly wouldn't be happy if someone else turned up onsite without any warning! They book me because they expect to get me!

 

 

> provide the main items of equipment to do your work

 

Mostly or entirely all the equipment is provided by the hire company (in most 'freelancer engagements')... except the bits that are still back at the yard, not on site....

 

Personally I do both, as in provide all the gear as well as provide only my labor depending on the client...

 

 

 

>You are probably employed if you:

>

> have to do the work yourself

 

See above comments.

 

> work for one person at a time, who is in charge of what you do and takes on the risks of the business

 

Bit grey for labor only freelance work? Again what definition of time is been used? Most job's 'freelancers' are directed what to do, and the only real risk the 'freelancer' has is future bookings...

 

> can be told how, when and where you do your work

 

See above...

 

> have to work a set amount of hours

 

Does been booked for the job hours + load out fall foul of this or not? Certainly can't come back tomorrow to finnish up in most cases.

 

> are paid a regular amount according to the hours you work, and get paid for working overtime - even if you do casual or part-time work, you can still be employed

 

Usually a regular 'Day rate', and an extra half day if the job runs over over the 'day' period..... how's that viewed?

 

 

 

So I'm somewhat confused......... on the basis of HMRC's "box ticking for dummys"... I know my own status.... but I'm interested in the discussion of 'are we really freelancers ' in this industry, really seem grey to me, especially for people who only provide labor...

 

 

To the OP, I would expect your travel expenses are what you can reasonably justify in the sole course of your business. If you have to travel from your folks house, then that I would expect be fine* (*I'm a tech, not a tax adviser!), just don't try to claim the journey there.....

 

Do some research on the tax law, claim what you think you are allow and if the tax man says different, argue your case if you think your right and can back up your thinking (the guys on the ground don't necessarily know whats correct, they only know the "common" things.. I had a hell of an argument when I registered for VAT as the chap who come round could not fathom that Thomann are registered for UK VAT, and my invoices were valid UK VAT invoice for reclaiming vat on stock sill held, bough within the 4 years before I registering... he couldn't get his head around an EU supplier giving me valid VAT invoices and my having been charged VAT, he learnt a lot on that occasion when his boss set him straight!)

 

 

 

-s

[Stuart91]

It's very important to note that in the section you quoted, each bullet point should be read as 'AND' not 'OR'. So to be self-employed you should meet all 5 of the bullet points.

 

Meeting all five seems like quite a high hurdle.

 

I could envisage a self-employed crew member, who meets the first four requirements, but could potentially fall foul of the fifth, because he's ended up spending most of his time in a telehandler that's been provided by the client.

 

Does a self-employed lighting op have to provide the majority of the rig that they are running? Or is bringing their own control surface enough?

[stories]

Doing a little reading on self-employment status,

 

ES/FS1 / CIS 349 from:

http://www.hmrc.gov.uk/selfemployed/tmaemployed_or_self-employed.shtml

 

are a little more helpful than the basic checker.

 

Having read that I would think most 'freelancers' in our industry would have a fair bit of trouble convincing HMRC they are indeed self-employed for all there clients....

 

Does anyone in our game (for jobs providing only labor) ever get a brief, asked to quote for the job, submit a quote etc before been booked.... Or just get a phone call asking if they are available on a given day, told when and where to turn up, possibly some info about the job last minute, then told what to do once on site and generally treated like an employee, setting up the companies equipment?.

 

Interested in other interpretations (and how you've interpreted things), as we'll never get a proper answer until someone gets turned over by HMRC..

 

-s

[Junior8]

The basic thing to remember is that HMRC are really only interested in making sure that someone pays the tax and NI due on the income. That being said looking at the definition of Casual or Irregular Work at the gov.uk website it would seem hard of the OP to claim self-employed status on the basis of the work he is doing. On the other hand if what he is doing is casual labour the HMRC website makes clear that the employer must make the deductions. Going back to the OP again the question was can travel expenses be claimed. Well irrespective of employment status if the total income is less that £10000 it is immaterial as there is no point setting any expenses against tax as there is none to pay anyway. Over that no-one, irrespective of employment status, is entitled to set travel expenses against tax in the course of journeys to their usual place of work. Many a self-employed person has found that to their cost if faced with a tax inspection. If you search on here you will find a lengthy thread about this a few months ago. I suspect that the OP would not be allowed to set the exes against tax in this case.