Finance for freelancers – Northern Ireland
- The VAT Flat Rate Scheme (FRS) has been changed from 1 April 2017 for "limited cost" businesses. This will almost certainly make the FRS unattractive for freelancers and consultants.
- Sole trader class 2 NI contributions are now part of the self-assessment (tax return) process, alongside income tax and class 4 NI contributions.
- Class 2 NI contributions are £2.95 per week for 2018-19, and £3 per week for 2019-20.
The proposed abolition of Class 2 has now been abandoned.
- Class 4 NI will stay at 9% at least for the duration of this parliament.
- For the year 2018-19 the personal allowance (i.e. free of income tax) is £11,850. From April 2019 it will be £12,500.
- The higher income tax rate of 40% kicks in after £46,350 (2018-19) for England, Wales and NI, £50K from April 2019. The income tax bands for residents of Scotland are now very different. Check handout 3.
- VAT threshold is £85,000 from 1 April 2017. So you have to be VAT registered if your turnover in any 12 months hits that level. This threshold has been frozen until 2022.
- The Annual Investment Allowance (to buy kit and machinery) is £200,000 (since end of 2015), and will be £1m per year in 2019 and 2020.
- Corporation tax is 19% for all from April 2017, reducing to 17% from 2020.
Change to HMRC phone numbers (from 12 June 2013)
- HMRC Helplines (opens in new window)
Grants and loans for new businesses
The most important thing is to keep a sharp eye on your cash and don't throw money around. You might also be able to get a loan or grant from some of these places:
- Business Finance for You - an advice site for business
- The New Enterprise Allowance - an allowance and business mentor, through JobCentre Plus
- Prince's Trust - aimed mainly at 18-30 year olds
Useful sites to deal with late payers
- www.payontime.co.uk includes an interest calculator
- www.gov.uk info about the legislation
Late Payment Legislation was introduced across all EU countries from March 2013.
The BusinessLink site has been replaced in England by www.gov.uk
Tip sheet 1 - Making the most of your money
Tip sheet 2 - Types of business
Tip sheet 2f - Defining production freelancer status
Tip sheet 3 - Tax and National Insurance
Tip sheet 4 - Paperwork, record keeping and digital tax
Tip sheet 5 - VAT
Tip sheet 6 - VAT - Flat rate scheme for small businesses
Trading with the ROI (nibusinessinfo.co.uk - opens in new window)
Tip sheet 8 - Accountants (what they do and what to ask them)
Tip sheet 9 - Some practicalities, including an insurance checklist
Tip sheet 10 - Business plans
Tip sheet 12 - Your public face
For Microsoft Office (Excel and Word) users...
If you need these templates in other formats, please email us at: firstname.lastname@example.org
Download all MS Office templates together (Zip file)
Spreadsheet - for personal (not business) spending
Spreadsheet - Pay Slip record for PAYE freelancers
Spreadsheet - Cash flow planner incl. PAYE income
Spreadsheet - Income and Expense (Profit and Loss) account for businesses
Spreadsheet - Cash flow for sole trader/Ltd
Template 7 - Invoice. (Or here for a pdf example with notes.)
Handout 13 - Blank project proposal form - with notes
For media freelancers (including payroll freelancers)Simple "Confirmation of Booking" letter - downloads Word doc in new window
For Apple format (Numbers and Pages) users...
Download all Apple format templates together (Zip file)
Spreadsheet - Personal (non-business) spending
Working spreadsheet - Pay Slip record for PAYE freelancers
Working spreadsheet - Simplified freelancer cash flow planner
Spreadsheet - Income & Expense (Profit & Loss)
Spreadsheet - Cash flow forecast
We often meet trainees who are working in the UK but have moved to the UK from another country.
To check how much tax you might have to pay, have a look at the guidance on the HMRC website. Specifically, it's worth looking at the definitions of:
VAT registered, and selling overseas?
If you're VAT registered in the UK you need to be sure whether or not to account for VAT yourself, or whether your client has to account for it.
The rules vary, broadly based on
- whether the client is based within the EU or not
- whether they are VAT registered in their own country or not
This is not the place to go into detail, but you can find out more on GOV.uk: HMRC - VAT and Supply of Services
You may well need professional advice from an accountant who is used to working with international clients.