Invoicing & Per Diems

[stories]

You need to be very careful how you invoice for anything that might affect your self-employed status. In this respect itiba above is correct. You see it is perfectly possible that a generous client could give you an allowance for subsistence that would be immediately struck out if declared as a business expense since these have to be solely concerned with carrying out your business. In the case of the upcoming job just treat it all as income and only set against it allowable expenses. In the case of the August job declare it as income but again set against it any allowable expenses. For the self employed most subsistence and quite a lot of travel is non-allowable see here http://www.hmrc.gov.uk/manuals/bimmanual/bim47705.htm There was a debate on here some time ago about the definition of itinerant traders and whether it applied to self-employed contractors in our sector without reaching any firm conclusion. However a contact of mine who operates outdoor markets had a tax inspection and was firmly told that he could not claim for travel from his home base to the market venue since the latter was his place of work - take that for what it is worth as an indication of the approach that might be taken.

 

 

Surly you can invoice for what and how you like? Invoice totals added up, less allowable expenses equals taxable profit (more of which are better for the revenue). I see not issue myself quoting a day rate plus expenses... (saves me time working out costs to add in advance, may save my client a few quid when I over estimate a cost etc.. saves me the risk of estimating a reasonable cost vs real cost for things I don't often do/use).

 

The problem comes when surly when you are trying to deduct expenses like food you ether can't clam or don't have receipts for etc... ?

 

 

I don't personally see how, how I itemise or not an invoice is a problem. Though I've not yet had to have the argument with the revenue (I can off on top last time I had a run-in with them so not to worried) so only my opinion. My accountant has certainly never flagged it up.

 

In respect of disguised employment, I gather they look at the way your engaged/do business, not how you fudge the paper work (which has made me chuckle with a few companies I do business with and have strict invoicing rules... they talk the talk, but certainly don't walk the walk... and unfortunately our business, certainly as a free-lancers is very boarder line most of the time.. imo).

 

My grip is companies that ask for receipts before they will pay expenses and only want billing at the value of the receipt. Firstly I need to keep my receipts, pony up the cast at the time if you want the paper work, secondly, my invoice is your paper work, thirdly I'm a business and need to cover cost of my time dealing with receipts for dinner etc... I may well ad a bit on for that... deal with it... (se point 2).

 

The Crux I would think is that the majority of 'freelancers' are not genuinely self-employed (most companies I do labour only work for certainly treat free-lancers as temp employees, despite the paperwork fudge...), they are casual or temporary employee's of several companies, one the plus side were are a fairly small industry for the tax man to go after en-mass, so only likely unlucky individuals that will get tripped up.

 

So I think it depends what ans how you do Business that's more important than how you write up your invoices.

 

( I benefit from running a small hire business with a small warehouse full of kit, as well as 'free-lancing', as well as been VAT registered, as well as supplying services and equipment to some of my clients.. However some of my tool bag and me engagements more than likely, on balance, fall foul of the disguised employment rules.... Role on client requiring lampy/sound to provide there own desk etc... : O )

 

-s