Tier 1 G- Self Employment. Question regarding registering

scorpio_besal · Post by **scorpio_besal** » Sun Feb 26, 2012 3:27 pm

Hello to all of you lovely people,

Could I ask you to share your knowledge about self employment, I am thinking of it however I need you guys to help me with following:

" https://online.hmrc.gov.uk/shortforms/f ... 1&sub-dept "

and it asks for

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1)When did you start working for yourself?--- I have nt started it yet , I would start some time after April 2012, so can I put in a future date

2)What sort of self-employed work do you do?--- Can I put in IT Consultant or would it be sole trader?? If I am a web designer.

3)What is the name of your business?--- I dont have a LTD company, so what do I need to enter here.

4)Business address line 1 and Business telephone number:--- I dont have a business address, as I am thinking of working from home for my self employment and put my mobile number in business phone.

5)If you are, or will be, doing all your work for one person or firm, please enter their name and address.--- I would be working for only 1 person , is that OK ?

6)UTR--- will I get this number after registering as self employed.

7)Invoice and contract agreement--- do I need to make this on my own of an accountant would make this for me.

8 Since I want to start my self employment after 7 April 2012, how would I need to go about paying tax on the income which I would get, do I need to pay it on monthly basis or is it ok for me to pay it after April 2013.

---------------------------------------------

I WOULD REALLY APPRECIATE IF YOU COULD TAKE SOME OF YOUR TIME TO HELP ME ON THIS, I AM SURE THIS COULD HELP OTHERS.

shahjee11 · Post by **shahjee11** » Sun Feb 26, 2012 4:49 pm

Hi there,

I will try to answer all your questions one by one.

1) You can not register with a date in future, you will have to wait until you actually start trading.

2) If you are a web designer then this is your business. You can say you are an IT consultant as well.

3) If you dont have any name for the business then just leave that blank. You may wish to put your own name as your trading name.

4) Home based sole trader so just put your home address.

5) Yes, just give the details of the firm/ person you will solely work for.

6) Yes. UTR will be allocated after you have been registered.

7) Its your choice. You can either prepare your invoices yourself or ask your accountant to do it for you.

8. In either case, you will have to submit a tax return. You may wish to make payments to HMRC every month and at the end of the tax year, submit your return to get every thing adjusted. Or you may leave it until the end of the tex year, send your return through and pay all your due tax at that point.

Hope this helps.

scorpio_besal · Post by **scorpio_besal** » Sun Feb 26, 2012 5:11 pm

Shahjee, You have brought a smile on my face, thanks a ton.

I am going to do exactly like you suggested, I am going to start my self employment some time in 2 week of April, so which means, I would have to register once I would get my first income.

Ex: My first income gets credited to my bank account on 7 April, so when I would register with HMRC, I would have to select 7 April 2012 as my start date.

With regards to the name of the occupation and the business, if I were to say , IT CONSULTANT and Business as BESAL MON, you think it would be al-right then.

Lastly , I am going for extention in 01 March 2013, so when I would have to show the proof for income through self employment , I would need to show them the following:-

UTR

INVOICE for the months where I have earned income through self employment.

BANK STATEMENT

2 NI , for the time I have started my self employement.

Any thing else you think I would have to include for self employment at the time of application
------

TAX:- Say If I were to pay the TAX at the end of the financial year 2012-2013 , when i would go for extention in March 2013, if they ask me about the TAX on the income earned from Self employment , do I need to include covering letter saying that I would be all the TAX from April 2012 to March 2013 , in April 2013. Do you think it would be OK.

INVOICE:- Do I need to have 2 invoice for each transaction or income, say I have worked for some one and he has paid me 1200, so does that mean that I have to give him the original invoice and I would keep the copy of the invoice.

And I believe it does not matter if I am working for only one person through out my self employment.

BANK ACCOUNT:- Do I need to have business account for self employment or can I still use my personal bank account where I am getting income from my REGULAR EMPLOYMENT.

Insurance:- I have read in lot of places, that you should have insurance if you are showing as self employed, is it true.

I want to thank you again in advance.

shahjee11 · Post by **shahjee11** » Sun Feb 26, 2012 5:29 pm

You are welcome.

HMRC will ask for the date you actually started trading meaning there by the date you actually provided any services. Does not matter if its the date you got your first payment etc.

as I said, if you choose to go with a business name then thats fine. nature of the business will be IT consultation as you said.

Proof of self emp Inc should be Invoices, Contract of Services, Bank statements, Class 2 NI contribution bill confirming you are registered with HMRC. You will also have to engage a qualified accountant as per the guidance to prepare your accounts and balance sheet/Income and expenses statement and a letter to confirm your gross and net self emp Income.

The accountant can explain in the letter that from april to Feb. whatever tax you are due will be paid after the return is submitted to HMRC at the end of the tax year.

Do keep a copy of invoices. Also the copy of contract of services.

You will have to say to hmrc if you will work for one person/firm or not. It does not matter to HO.

Business Bank account will be better option to go with.

Insurance is not necessary for HO purposes.

Hope this helps.

scorpio_besal · Post by **scorpio_besal** » Sun Feb 26, 2012 6:12 pm

Shahjee, Please accept my sincere appreciation, you are very kind and helpful.

If it was not you then , I dont know who would have helped.

Shahjee, could you help me with what do you mean by contract of services, from where I would get this, could you direct me to a link from where I could get some sort of template , so that I can make one for myself, it could be of any sort , atleast I would know how to make it.

About the Copy of invoice, you mean that I would have to make 2 copies, one I would need to give to the person whome I am working for and paying me for the services and one for myself , for my services.

shahjee11 · Post by **shahjee11** » Sun Feb 26, 2012 6:29 pm

See when you provide services to other person or a firm, the terms and conditions under which the relationship of the parties is regulated is called the contract or agreement.

This should include the details of the contracting parties, addresses, tel.numbers. It should also explain what services are being provided by the provider (you) and Client (person/firm), what are the charges/fee for the service,mode of payment, date of delivery etc.

Have a look of the following link. you can google it and you will find alot of these templates.

http://www.weblaw.co.uk/it-contract-templates/

about invoices, yes you will have to keep a copy for your own records after you have given one to the client.

scorpio_besal · Post by **scorpio_besal** » Mon Feb 27, 2012 6:43 pm

Shahjee, Thanks again, for the quick reply and clearing my doubts, the link which you sent me was really helpful

... as you suggested I did a quick search on Google about the contracts and invoice.

----------------------
With regards to Invoice, do I need to put the amount which I am charging from the customer without VAT/TAX or A flat rate which does not include the VAT/TAX, as I would be paying it later on at the end of the financial year.

If I were to say that the name of my business is BESAL MON, that does not mean that its a LTD company, its just a name which I am giving HMRC as formality , is that correct , if not then how do you think that works.

and could you please let me know if I have to get a letter from the accountant for both the self employment and employment when I would show my earning at the time of T1 G extension, as I am working full time for a company.

Lastly, when the amount goes into my business account, what sort of reference I would need to ask that person to put in, so that the same can be shown on my Bank statement, EX:- Payment for Services, can you suggest me anything better or is it OK.
-----------------

So if I were to show the following for my self employment earning, would it be OK, could you just double check it for me:-

1) Copy of all the invoice
2) Invoice Explanation
3) Business bank statement
4) NI2 bill from the day I have declared self employment
5) UTR
6) Copy of the contract

Anything else which you would like to suggest which I need to include in the list.

AccountantMatthew · Post by **AccountantMatthew** » Mon Feb 27, 2012 8:01 pm

With regards to Invoice, do I need to put the amount which I am charging from the customer without VAT/TAX or A flat rate which does not include the VAT/TAX, as I would be paying it later on at the end of the financial year.

DO NOT include VAT! You are not registered for it (the tax you will pay on your profits is income tax)

If I were to say that the name of my business is BESAL MON, that does not mean that its a LTD company, its just a name which I am giving HMRC as formality , is that correct , if not then how do you think that works.

This link will take you to BusinessLink's page on what should be contained in an invoice. http://www.businesslink.gov.uk/bdotg/ac ... =RESOURCES and how you will style your business name.

...and could you please let me know if I have to get a letter from the accountant for both the self employment and employment when I would show my earning at the time of T1 G extension, as I am working full time for a company.

The letter can cover both (you don't need separate letters). Just tell your accountant what you need.

Lastly, when the amount goes into my business account, what sort of reference I would need to ask that person to put in, so that the same can be shown on my Bank statement, EX:- Payment for Services, can you suggest me anything better or is it OK.

It doesn't matter - the main thing is that the payment made to you can be matched against the invoice. It's more for your reference than anybody else.

scorpio_besal · Post by **scorpio_besal** » Mon Feb 27, 2012 8:52 pm

Matthew, Thanks for helping, I appreciate it. The link which you provided gives detailed information about the invoice, and thats what I am going to incorporate in my invoice template.

There are few things which I would like to clear.

* a unique identification number
(Is it the same as invoice number or is it the UTR number)

* the company name and address of the customer you are invoicing
(can it be a name of person/individual who does not have a company name or business, as I would be working for a friend and he does not own a company / business )

* a clear description of what you are charging for
(Say If I were to put the description as "web designing fee", would that be enough, or would I need to include more like the name of the website and what all I did for him etc )

* the date the goods or service were provided (supply date)

( would it mean the date the service is provided to the client and it has to be same day when the amount should be credited to the bank account-- say that web designing was done on 11 April 2012, and the same day the amount was paid into the bank account).

I would like to thank you again, for helping.

AccountantMatthew · Post by **AccountantMatthew** » Tue Feb 28, 2012 8:49 am

No problems!

* a unique identification number
(Is it the same as invoice number or is it the UTR number)

It just means the invoice number - basically so if anyone quotes the invoice number you both know what is being talked about(!) There is no requirement to put your UTR on the invoice and, in fact, I wouldn't do this.

* the company name and address of the customer you are invoicing
(can it be a name of person/individual who does not have a company name or business, as I would be working for a friend and he does not own a company / business )

Yes individual names can be included on an invoice - the name you use is who you are invoicing (so if you invoice 'ABC Ltd' you don't use 'Dave' but if you are invoicing Dave then you do!)

* a clear description of what you are charging for
(Say If I were to put the description as "web designing fee", would that be enough, or would I need to include more like the name of the website and what all I did for him etc )

Up to you really. Potentially you can use 'web designing fee and related services for www. whoever .com' as a description - so long as you both then are aware of what was done and for whom. There's usually little need to detail absolutely everything you did; the main thing to consider is that both parties know what the invoice is for.

AccountantMatthew · Post by **AccountantMatthew** » Tue Feb 28, 2012 8:51 am

Sorry, I forgot to answer your last point ....

* the date the goods or service were provided (supply date)

( would it mean the date the service is provided to the client and it has to be same day when the amount should be credited to the bank account-- say that web designing was done on 11 April 2012, and the same day the amount was paid into the bank account).

The invoice date will be the date you raise the invoice. It'll usually be undertaken as you complete the work. However you may invoice in advance of course or at some other time - it's really between you and the client.

The rules around this do become more complex when/if you are VAT registered as tax points come into play but I wouldn't worry too much about that until that time comes.

smartkhan · Post by **smartkhan** » Tue Feb 28, 2012 9:41 am

Hi Matthew,

In the case above if the person is working as a self employed and earning through tutions. Do he need to have a business account or personal bank account will suffice the needs? You don't get invoices when you give classes to individuals. Is that right?

AccountantMatthew wrote:No problems!

* a unique identification number
(Is it the same as invoice number or is it the UTR number)
It just means the invoice number - basically so if anyone quotes the invoice number you both know what is being talked about(!) There is no requirement to put your UTR on the invoice and, in fact, I wouldn't do this.

* the company name and address of the customer you are invoicing
(can it be a name of person/individual who does not have a company name or business, as I would be working for a friend and he does not own a company / business )
Yes individual names can be included on an invoice - the name you use is who you are invoicing (so if you invoice 'ABC Ltd' you don't use 'Dave' but if you are invoicing Dave then you do!)

* a clear description of what you are charging for
(Say If I were to put the description as "web designing fee", would that be enough, or would I need to include more like the name of the website and what all I did for him etc )
Up to you really. Potentially you can use 'web designing fee and related services for www. whoever .com' as a description - so long as you both then are aware of what was done and for whom. There's usually little need to detail absolutely everything you did; the main thing to consider is that both parties know what the invoice is for.

AccountantMatthew · Post by **AccountantMatthew** » Tue Feb 28, 2012 11:21 am

If s/he is self employed in the definition of everyone other than UKBA (so sole trader rather than owner/director of a limited company) then s/he can use their personal bank account.

Now banks may insist that you open a separate business account with them but it is a matter of contract between you and them rather than a legal requirement.

If a company is involved then a separate bank account is required as the company is a separate legal person.

If s/he is a sole trader and teaching individuals then they will still issue invoices to that individual.

scorpio_besal · Post by **scorpio_besal** » Tue Feb 28, 2012 6:27 pm

Hi Matthew,

Appreciate your time and efforts which you have put in to help others, God bless you, I mean it.

When you say the word "sole trader", is that what I need to type in when I would register on the HMRC website @ https://online.hmrc.gov.uk/shortforms/f ... 1&sub-dept

there are two places where they ask for this, specially where they ask "ABOUT YOUR BUSINESS" section :-

1) What sort of self-employed work do you do?

I am web designer, so do I say "web designing" OR sole trader

2) What is the name of your business?

Do I put in my name as I dont have a name for my business yet as I am self employed, Do I put in my name OR "sole trader".

3) If my accountant is registered with the Institute of Chartered Accountants in England and Wales (ICAEW), I hope it would be alright when I would submit my self employment earning details to UKBA at the time of extension ,which would include, letter from the accountant , like Invoice explanation, profit and loss , etc

Could you please help me on this Matthew.

abby92 · Post by **abby92** » Tue Feb 28, 2012 10:52 pm

@Accountant Matthew

Can I just ask that the letter from the accountant/ Proft and loss accounts should also include your employed salary as well or should it be only used for self employed earnings?

If I provide my salary slips for my employed earnings and accountant's letter/accounts for self employed income separately, will I be ok?

AccountantMatthew · Post by **AccountantMatthew** » Wed Feb 29, 2012 8:57 am

No worries scorpio_besal! Anyway ....

1) What sort of self-employed work do you do?

I am web designer, so do I say "web designing" OR sole trader

Web designing is fine. No need to mention sole trader as everyone who fills in this form is a sole trader.

2) What is the name of your business?

Do I put in my name as I dont have a name for my business yet as I am self employed, Do I put in my name OR "sole trader".

If you want to have a business name then you can. Legally you would be scorpio_besal trading as XXXXX.

For help on what can/can't be used, see http://www.businesslink.gov.uk/bdotg/ac ... =RESOURCES

3) If my accountant is registered with the Institute of Chartered Accountants in England and Wales (ICAEW), I hope it would be alright when I would submit my self employment earning details to UKBA at the time of extension ,which would include, letter from the accountant , like Invoice explanation, profit and loss , etc

Yes - there are no problems there as the ICAEW is a UKBA recognised supervisory body.

AccountantMatthew · Post by **AccountantMatthew** » Wed Feb 29, 2012 9:00 am

For abby92:

Can I just ask that the letter from the accountant/ Proft and loss accounts should also include your employed salary as well or should it be only used for self employed earnings?

If I provide my salary slips for my employed earnings and accountant's letter/accounts for self employed income separately, will I be ok?

Accountant letters can also be used to verify employed income as well as self employed income.

So long as you have the requisite number of 'pieces' of proof for the income you are claiming then I don't envisage that there should be a problem.

scorpio_besal · Post by **scorpio_besal** » Wed Feb 29, 2012 7:04 pm

Hello Matthew,

Thank you again ever so much

On the HMRC website, while I am trying to register as self employed (sole trader) it is asking for :-

1) UTR number , how would I get this one.

2)There is one place where it asks this question
"If you are not a UK resident and have come to the UK from abroad within the last 12 months, please tick the checkbox below."

(I came to the UK on the 19 March of 2011, so do I need to check this box, or leave it)

3) Regarding the proof for self employment , according to the UKBA website http://www.ukba.homeoffice.gov.uk/visas ... s/#header1

It says " proof of your earnings from self employment I must show the following" :

letter from your managing agent or accountant;
(what information should my accountant include in this letter, is it same as invoice explanation)

4) If I start my business from 10 April 2012, would I need to pay the tax monthly on my self employment income or can I pay this at end of the financial year, and say if I pay the tax at the end of the financial year however my extension is due in March 2013, and when I would have to show the earning from my self employment, since I have not paid the tax yet as I am waiting for end of the financial to fill my tax, would it be al right , do I need to show them some sort of letter to prove that I would be paying my tax after April 2013.

COULD YOU HELP ME WITH THIS LAST ONE..PLEASE

scorpio_besal · Post by **scorpio_besal** » Sat Mar 03, 2012 9:01 pm

Hi Matthew,

Could you kindly help me with the last few questions??

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Tier 1 G- Self Employment. Question regarding registering

Tier 1 G- Self Employment. Question regarding registering