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I'm currently out of work. A little while ago I did a one-off job for someone, largely as a favour but it was a paid gig. I've just chased payment and been met with "can you send an invoice?"
I'm not a registered business or a sole trader. I'm claiming JSA, the last time I did any contracting was 20 years ago. What do I need to do here, is it just a case of spinning up a Word doc with my name at the top and a figure at the bottom? Can I do that as a regular individual?
I thought the arrangement was "I'll give you a few quid if you'll help me out." I've done loads of favours for mates (and folk on here) over the years with the expectation of providing free help and very occasionally been given like £20 or a bottle of something malty for my troubles, but for the avoidance of doubt I'm not trying for a tax dodge here. It's not a large sum of money, it's a couple of hundred quid, so any set-up fees for a business or an accountant I assume will wipe out most of it.
TIA.
It just needs to be a doc that says "INVOICE". invoice #no. Invoice date. Due date (usually net30). Their name+address. Your name+address. Amount owed + payment account
That's it. Nothing more, nothing less. Just a paper record for both parties that represents / describes a transaction.
Under £1k you don't need to worry about self assessment so crack on
is it just a case of spinning up a Word doc with my name at the top and a figure at the bottom? Can I do that as a regular individual?
Yep. You might want to add how you want to be paid (bank details etc) and how long they have to pay.
They probably just need a record of why any payment has been made.
is it just a case of spinning up a Word doc with my name at the top and a figure at the bottom? Can I do that as a regular individual?
AFAIK, yep, simple as that. They probably just want a receipt in order to claim as a business expense or something.
More or less what you said. Create invoice number one. You can earn up to a set amount this way before you have to complete a self assessment tax return. I think it's £1K year. I'm afraid I don't know how/if invoicing this small amount of work impacts on your JSA.
What do I need to do here, is it just a case of spinning up a Word doc with my name at the top and a figure at the bottom? Can I do that as a regular individual?
Yes and yes.
Other party just needs a bit of paper for their tax return. Done that a few times for 3 figure 'homers'. Pretty sure I just downloaded an inoffensive looking template and used that.
Up to you what you do your end....I think I had one or two when I was PAYE which I might just have forgotten about. I've been doing self assessments for the last 15 years or so and just added it to everything else there.
Sorry - don't know anything about JSA.
Brill, thanks all. I guess googling "invoice template" might be a good a start as any.
I'm less concerned about JSA impact, I have a fortnightly patronisation session so I can bring it up on the next one.
Excel one up. Save as pdf email it
Make a brew.
I’d suggest including 30 days as your payment terms.
most of invoices I've had from trades are sent on day of completion most state within 14 days last one was payment within 7 days or 10% discount if paid on completion.
I guess googling “invoice template” might be a good a start as any.
Pretty much what I did when I started out! Nothing else to add - everyone else has covered it all
Was this for work you did before claiming JSA? If so make sure you put the relevant dates on it so even if paid during the JSA claim it’s clear it doesn’t conflict. If it’s during the JSA claim you probably want to check the rules - eg if you are permitted X hours a week I’d word it so it’s clearly under that.
Didn’t see this mentioned so apologies if covered, but I’d suggest including 30 days as your payment terms.
id put 7 or 14! 30 days is b2b terms with an agreed credit facility - you’re not their bank!
Skim reading but I'd also say what the invoice was for, something basic like "Building a bespoke cabinet" or whatever it is you did. If it was just labour just say X days labour at y amount per day.
Was this for work you did before claiming JSA?
During.
id put 7 or 14! 30 days is b2b terms with an agreed credit facility – you’re not their bank!
As I said, it was primarily a favour for a friend, I'm only being paid at all because she knows I'm out of work. I have no concerns around potential lack of payment.
As I said, it was primarily a favour for a friend, I’m only being paid at all because she knows I’m out of work
Why can't she just bung you a few quid to help you out?* Invoice make things formal and traceable. If she has to produce accounts/invoices for a HMRC check and there's a problem and they start checking up on you due to tne invoice, and you hadn't covered it off at your JSA patronising session, it may (not my area) cause you more grief.
*I did not type that.
Oh, that's a point. What do I do about VAT?
The agreement we had was... let's say it's building Lego sets. I agreed to build x Lego Sets, paid at y amount per set regardless of time taken. Additionally, some of the sets had broken pieces so that took extra unplanned work.
I intend to tack on the extra work even though it wasn't prearranged. Would it be churlish of me to assume that x was before VAT? Is VAT even an issue at such a small value, do I mention it at all?
You need to have a turnover of >£90K before you have to bother with VAT.
VAT not applicable in this case.
Why can’t she just bung you a few quid to help you out?
This is what I thought was the case. That said, I have no qualms with doing it officially, but that being the case I want to make sure I'm doing it correctly.
VAT can be safely ignored unless you intend to rapidly scale to the point where you're turning over £85k or more a year.
The invoice isn't for you, it's a paper trail to make sure that money from her business (if that's what's paying you, rather than it just being a personal payment) isn't just vanishing into thin air. As has been said it doesn't need to be complicated.
Groovy, thanks all.
@cougar - I have an invoice from back in the day that I can send you - could act as a template. The thing I nearly messed up on was ensuring my invoices were properly numbered. I changed accounting software and restarted the numbering. Thankfully with a different prefix.
There are legal requirements over what an invoice should include btw so just check whatever template you use has them all.
As mentioned you can ignore the 'VAT amount if applicable' bit.
An invoice allows the client to claim the work against tax if it’s appropriate, it’s a pretty reasonable request.
Yeah, it's just for thier records so they can actualy process the payment you, something like this will be fine, (without the VAT bit as it's not applicable).
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