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Limited company, LLP or sole trader? Best freelance option please.

Discussion in 'General Business Forum:' started by soho100, May 5, 2015.

  1. soho100

    soho100 New Member

    Hi all.
    At the moment I'm employed part-time with one company but I'm picking up more and more freelance work. The company I work for is fine with me resigning and being re-employed on a freelance basis but they are concerned that if they are my main source of yearly income they will somehow be liable for NI and it could get complicated for them. So I'm looking for a way of working on a freelance basis with my existing employer which wont cause them any future tax/NI/accountancy issues whatsoever. I'm thinking Ltd company or maybe LLP or even sole trader but I'm not sure if any of these options are viable in this situation. Any input much appreciated.
     
  2. Dave L

    Dave L Well-Known Member

    You assume full responsibility for your own contributions in all three scenarios.
     
  3. bigdave

    bigdave Moderator Staff Member

    The basic/starting point for self employment is 'sole trader' and that is more than sufficient for a freelancer, unless your turnover is over £82,000, at which point you're required to be VAT registered.

    We had this issue with my other half as she's self employed but works 3 days a week for one company. Her client's accountant's interpretation of the hmrc rules are that if you travel to the same office on a regular basis to undertake the same role for the same client you are employed and that client is therefore liable for the usual expenses and duties of employing someone. The way round this is for each visit to the clients office to be for a different purpose. This can be defined in the monthly invoice you submit to them by listing some/all of the projects undertaken in that month. So for example May's invoice could list £1000 - 'john smiths builders, tonys hair saloon, fred's diamond's'. Whilst June's invoice could list £1000 - 'terrys chocolate shop, sandra's toenail bar'.

    Also worth noting that HMRC say you can't claim business mileage for travelling to or from an office or 'regular place of work' so the journey to that clients office can't be included as a business expense.. unless of course, its for a 'different purpose' each time.. i.e.; meetings, delivering or collecting materials relating to a project... so on paper it's not your regular place of work. (just keep a diary with 'meeting dates' at that destination and that will do).
     
  4. soho100

    soho100 New Member

    Hey thanks BigDave that's a perfect answer.
     

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