An invoice is a beak. You send an invoice when you lot piece of work for someone and are self employed. Well-nigh employers will non pay you unless yous send an invoice.

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When to send an invoice

When you agree to work with an employer you should negotiate a contract. The contract should say when you lot get paid. If you are working on a short-term projection, yous might agree to get paid once at the terminate of the job. If the project lasts a few weeks or months you lot might agree to become paid in instalments.

For example, our usual payment terms are:

  • 80% of the fee paid at the beginning of the projection
  • 20% of the fee paid at the finish of the projection

Employers need an invoice from y'all to make a payment if you are self employed. They will use your invoice in their annual study to Her Majesty's Acquirement and Customs (HMRC, the tax office) to work out their tax. They might also need it to report to a public funder on what they accept spent money on.

If you are on Universal Credit, try to negotiate monthly payments for long projects. This will help to go along your Universal Credit payments more regular.

What you lot should put in your invoice

An invoice volition often become sent to someone working in a finance department for payment. They will non know you or the piece of work you have done. Include all the information y'all think they need to sympathise the payment. If you forget something they can contact you lot for more details. The information you lot need to provide might modify depending on the project. But there are some things to include on every invoice.

Invoices should include:

  • An invoice number. This is a reference number you brand upwardly. People who pay you will put the invoice number on their payment. It will help you lot know when you lot go paid.
  • The engagement you lot ship the invoice.
  • A description of the work you did or the name of project you worked on.
  • The dates you worked.
  • Your National Insurance number and UTR
  • How to pay you. Some people like to become a cheque. Many more than adopt the money to go paid into their bank account. If you desire to get paid like this, include your bank account details.
  • Your contact details. Include your full name as it appears on your banking company business relationship. Add your business organization address, which might be your abode accost. Information technology's a expert thought to add your telephone number and email in case they have a question.
  • When payment is due. It is standard to get paid within 30 days of sending an invoice. Information technology'due south better to say on the invoice when they have to brand the payment.

Depending on your circumstances you might also include:

  • Your VAT registration number. People who earn over a certain amount have to register for VAT.
  • Your company registration number. Some people register a company and trade nether that.

IR35: checking you are cocky employed

Some people used to register themselves every bit a company to avoid paying income tax while working freelance. Companies can pay taxation-free dividends to directors instead of a taxed salary. Employers now have to check if people should get paid as self employed workers. The IR35 process helps HMRC stop tax avoidance.

IR35 checks your employment status. It makes certain the employer isn't trying to hide a worker 'off the books'. When you are employed a visitor has to pay National Insurance contributions. If yous are self employed they do not.

The employer volition brand these checks and enquire you questions if they need to. You exercise non have to do anything to make these checks yourself. The checks might have upwardly to 2 weeks. This might delay your first invoice payment.

Most of the checks nether IR35 will refer to your contract of work. The employer will arrive trouble from HMRC if y'all do non have a contract they can refer to.

Much more information on IR35 is bachelor. It is good to be aware of the process just yous do not have to know it in detail.