Confused- self employed or contractor - documents required?

[ankoos]

Hi,

I am currently under HSMP - 2 years visa and my extension is due in January 2010.

My income comes from two sources:
1) I am working full time as a salaried person and I have all the necessary documents for that.
2) I am also registered with HMRC as self-employed (not a company). Currently, I have two clients. With one client, I have an ongoing project for which i send him invoice at different intervals and i get payment. From my 2nd client, I get work as and when available. Once again, I raise the invoice for work done and he makes the payment.

I do not have a Business bank account. My salary and my invoice-payments go to my personal account. I do have the contract letter, payments-summary letter from clients, copies of invoices i raised and bank statements to show my earnings. I am not yet eligible to file tax returns as i just started this freelance business in May 2009.

I don't pay dividends etc to myself. My earning is simple. i do the work, raise the invoice, get payment in my personal a/c, pay NI to HMRC from the same bank a/c.


My confusion is:
1) Do I fall under independant contractor category?

2) Is independant contract category separate from self employed?

3) What documents should i submit to prove this earning and should it be under independant contractor or self employed?

4) What exactly do i need from the account - P&L a/c, balance sheet, or just a plain letter explaining the earnings etc?

5) In answer to question number 4, is there any template or sample letter that I can get so that i can simply ask an accountant to make a letter by giving him my earning proof etc. (I mean what exactly should be mentioned in accountant's letter/certificate and in which format)?

6) What should I do and How should I go about it?

I noticed that, in one similar discussion topic, Mr Chetan Ojha provided sample letters of what should be included. I need a help in such a format that helps me
1) prepare all the required documents correctly
2) present the documents correctly
3) Most importantly - prove this freelance earning in a way that can be provided to Home office as a part of my application.

Please advise at your earliest as the clock is ticking and with each ticking my heartbeat gets louder.....

best regards

[paone]

I guess u are an independent contractor same as me...

a)I got all invoices stamped from companies i worked for.

b)get tax accountant to define gross and net. on his letterhead.

c)bank statements proving the same..

d)and probably letters from the company stating the same.
-----------------------------------------------------------------
the below document is for HMSP - and not tier 1 initial ..
please double check,,
http://www.bia.homeoffice.gov.uk/siteco ... iew=Binary

Hi,

I am currently under HSMP - 2 years visa and my extension is due in January 2010.

My income comes from two sources:
1) I am working full time as a salaried person and I have all the necessary documents for that.
2) I am also registered with HMRC as self-employed (not a company). Currently, I have two clients. With one client, I have an ongoing project for which i send him invoice at different intervals and i get payment. From my 2nd client, I get work as and when available. Once again, I raise the invoice for work done and he makes the payment.

I do not have a Business bank account. My salary and my invoice-payments go to my personal account. I do have the contract letter, payments-summary letter from clients, copies of invoices i raised and bank statements to show my earnings. I am not yet eligible to file tax returns as i just started this freelance business in May 2009.

I don't pay dividends etc to myself. My earning is simple. i do the work, raise the invoice, get payment in my personal a/c, pay NI to HMRC from the same bank a/c.


My confusion is:
1) Do I fall under independant contractor category?

2) Is independant contract category separate from self employed?

3) What documents should i submit to prove this earning and should it be under independant contractor or self employed?

4) What exactly do i need from the account - P&L a/c, balance sheet, or just a plain letter explaining the earnings etc?

5) In answer to question number 4, is there any template or sample letter that I can get so that i can simply ask an accountant to make a letter by giving him my earning proof etc. (I mean what exactly should be mentioned in accountant's letter/certificate and in which format)?

6) What should I do and How should I go about it?

I noticed that, in one similar discussion topic, Mr Chetan Ojha provided sample letters of what should be included. I need a help in such a format that helps me
1) prepare all the required documents correctly
2) present the documents correctly
3) Most importantly - prove this freelance earning in a way that can be provided to Home office as a part of my application.

Please advise at your earliest as the clock is ticking and with each ticking my heartbeat gets louder.....

best regards

[ChetanOjha]

I guess u are an independent contractor same as me...

a)I got all invoices stamped from companies i worked for.

b)get tax accountant to define gross and net. on his letterhead.

c)bank statements proving the same..

d)and probably letters from the company stating the same.

You said you are working for a company? Do you mean you are employed by some umbrella company who do billing for you? If yes, you don't need to show invoices etc. as you can claim points as employed person.

[ankoos]

[/quote]
You said you are working for a company? Do you mean you are employed by some umbrella company who do billing for you? If yes, you don't need to show invoices etc. as you can claim points as employed person.[/quote]

Hi,

Thanks for your reply.

I am employed full-time in a company drawing salary from there and i have all the required documents to prove those earnings etc. so I am good on this front.

There is no umbrella company or anything. so, please ignore the above bit as i am all set regarding that.

My concern is related to my 2nd source of earning which is by providing freelance consultancy during my free time.

I am registered with HMRC as self employed providing business & IT consultancy. I am not registered as a company with HMRC. So, no umbrella company, drawing salary from this business etc.

I have two clients. I do work for them, i send them invoice and i get payment in my bank account. It is regarding this income that I need help the details of which i have provided initially.

please help.

[mvent00]

This link might be helpful for you.

[ankoos]

This link might be helpful for you.

Thanks dear. I have gone through this link including many more other topics but havent found answer to my query unfortunately.

[mvent00]

Applied in the UK for Tier 1 extension (LTR) following a two-year HSMP visa.

For proof / evidence:
a. Got a letter written by uni Finance Dept listing my salary for the period from the uni.

b. Found an idiot of an FCA - this after much ado - who re-listed the uni earnings on his letterhead, and confirmed the FOUR FREELANCE / CONTRACTUAL transactions as genuine and traceable to my bank.

c. I included a printed-off set each of the four email correspondence that had taken place with clients re my freelance work, and for the convenience of the caseworker, indicated USING STICKY NOTES / POST-ITS what they referred to. Also put a STICKY NOTE on the Accountant's letter stating where to further verify the freelance earnings in my application (ie., go to the print outs of my email correspondence.)

d. On the Bank Statements, indicated the relevant bank transactions / remittances by highlighting in yellow against the figures, not on them. Also put sticky notes to make any clarifications.

e. Prepared a list of all my transactions - salaried + freelance - on an excel sheet and wrote in 10 font size at the bottom that the tax on the freelance income was yet to be paid.

f. Said my prayers and despatched the packet.


2.
TIMELINE
HSMP visa expired: 11 Nov 2009
Application sent: 7 Nov
Application received: 11 Nov
Acknowledgement letter date: 10 Nov
Application assessed: Week beginning 30 Nov for applications received on / before 13 Nov.
Approval letter / visa dated: 02 Dec 2009; visa valid until 02 Dec 2012
Packet received: 05 Dec


3.
BOTTOMLINES
a. If your earnings are genuine, there's no need to fall for the hoo hoo ha ha about first forming and then registering as a company and paying back-registration taxes and fines WHEN YOUR ARE A FREELANCE CONTRACTUAL WAGE EARNER.

Contractors
If you are a contractor who does not operate either through your own company or as an employee, you may send:
an accountant's letter confirming a breakdown of your gross and net earnings for the period claimed; and
personal bank statements clearly highlighting all credit payments made to your account from employment undertaken during the earnings period claimed.

[ChetanOjha]

Hmm.

You may want to use one of the template for salary to present your details in more readable format.

http://www.immigrationboards.com/viewtopic.php?t=46010

[ankoos]

Hmm.

You may want to use one of the template for salary to present your details in more readable format.

http://www.immigrationboards.com/viewtopic.php?t=46010

Thanks Chetan,

I have already gone through the link you suggested and I will be using these formats for my applications. In fact, I have already drafted my salary details letter after getting an idea from these templates.

My original query, however, still remains unanswered.

1) Do i need P&L a/c and BS? or just a plain letter from the accountant explaining the earnings.
2) Since I am salaried from my main job and self-employed/contractor( still confused) from my part-time freelance consultancy job, should the accountant explain both the earnings or just the earning from freelance work (since i already have all the proofs for my salaried income)
3) Re no. 1, is there is any template that I can just prepare and then ask the accountant to mention the same in his letter so that he won't have to spend more time preparing the required documents - the more time he spends preparing the documents, the more money i will have to pay to him (£100/hour plus VAT).

[mvent00]

Hmm.

You may want to use one of the template for salary to present your details in more readable format.

http://www.immigrationboards.com/viewtopic.php?t=46010

Thanks Chetan,

I have already gone through the link you suggested and I will be using these formats for my applications. In fact, I have already drafted my salary details letter after getting an idea from these templates.

My original query, however, still remains unanswered.

1) Do i need P&L a/c and BS? or just a plain letter from the accountant explaining the earnings.
2) Since I am salaried from my main job and self-employed/contractor( still confused) from my part-time freelance consultancy job, should the accountant explain both the earnings or just the earning from freelance work (since i already have all the proofs for my salaried income)
3) Re no. 1, is there is any template that I can just prepare and then ask the accountant to mention the same in his letter so that he won't have to spend more time preparing the required documents - the more time he spends preparing the documents, the more money i will have to pay to him (£100/hour plus VAT).

Isn't it too expensive? I think you should look for an alternative accountant.

[ankoos]

(£100/hour plus VAT).

Isn't it too expensive? I think you should look for an alternative accountant.

This is one of the reason why I need to know what exactly is needed to achieve the goal. However, the most important thing is to get everything right for the case worker to avoid any problems.

If you have any suggestions about any alternative, then please do feel free to send PM.

[Sushil-ACCA]

(£100/hour plus VAT).

Isn't it too expensive? I think you should look for an alternative accountant.

This is one of the reason why I need to know what exactly is needed to achieve the goal. However, the most important thing is to get everything right for the case worker to avoid any problems.

If you have any suggestions about any alternative, then please do feel free to send PM.

On average cost should be around £350.00+ Vat (Vat is not a accoutnats income ) if Transactions are less than 20

costing

Software package -£100-150
office cost - insurance etc £ 50
+ Labour

[ankoos]

Rather than discussing the cost, I would be really grateful if someone could kindly address the main problem i have stated above.

[Sushil-ACCA]

Rather than discussing the cost, I would be really grateful if someone could kindly address the main problem i have stated above.

dont make big fuss on yr work , just get appointment on any high street accountant , which will sort out yr isssue--

on this site members discuss all issue and even some time they r not related to any particular thred but useful to many

[ankoos]

[quote="Rima"]Hi mvent00 and other senior members please help!

After screening the posts (and particularly “rice-porridgeâ€

[Sushil-ACCA]

[quote="ankoos"][quote="Rima"]Hi mvent00 and other senior members please help!

After screening the posts (and particularly “rice-porridgeâ€