Business Toolkit for Freelancers – England
The slides and materials for this ScreenSkills web training course can be downloaded below.
This set of help sheets is for people living in England. We also have versions for
Scotland >
Wales >
Northern Ireland >
If you are new to freelancing, check out the Creative Toolkit website. It has downloadable notes about freelancing in the Help-Notes section.
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Highlights:
Because of the coronavirus pandemic, you can delay paying VAT normally due before June 2020. It now has to be paid by March 2021.- 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 £3.00 per week for 2019-20. (£3.05 per week, 2020-21.)
The proposed abolition of Class 2 has now been abandoned.
- Class 4 NI will stay at 9% for the moment, but the Chancellor might try to increase it in 2021.
- For the years 2019-20 and 2020-21 the personal allowance (i.e. free of income tax) is £12,500.
- The higher income tax rate of 40% kicks in after £50,000 (2019-20) for England, Wales and NI. The income tax bands for residents of Scotland are now very different. Check help sheet 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 £1m per year in 2019 and 2020.
- Corporation tax is 19% for all since April 2017.
Change to HMRC phone numbers
- Worried about paying tax as a result of coronavirus pandemic? Phone: 08000 241222
- 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:
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
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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 - especially as we don't yet know what will happen with Brexit - 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.
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Please note:
Although every effort has been made to provide accurate tips and information, David Thomas Media Ltd accepts no responsibility for any errors, omissions or out-of-date facts. Trainees are advised to seek up-to-date professional advice on all financial and tax matters before making decisions relating to these subjects. Nothing in our notes, courses, webinars, downloads or social media should be considered as financial advice.
We believe our tips are useful - but they are only tips!
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