Q. I’ve recently returned to work and I am currently a self-employed advisor. I am working with a client but there are no pre-agreed hours or days in our contract – we agree the work required depending on what is needed and my availability. I invoice at the end of each month and they pay me a daily/hourly rate for the period worked. There are no deductions made for tax, NI, etc. I have had a limited company before but do not want to set one up this time because I may not be self-employed for long, and there are significant costs and overheads associated with operating a limited company for only a short period.
I am keeping part of the money I receive aside because I know I’ll need to pay tax on it at the end of the year. Is there anything else I should be doing to ensure I meet any legal or financial requirements?
Also, where can I find more details on the costs I can claim as expenses?
A. From a tax perspective, you must ensure that you are registered for Self-Assessment & monitor your turnover in case it exceeds the VAT threshold.
Depending on the nature of your business, you may wish to consider the necessary business insurances & you should also consider drawing up a formal contract for services to protect both parties in the event of a HMRC compliance check.
You can find a list of expenses here. The general rule is that they must be solely and exclusively for business use.