Looking for some advice. I left my permanent job a few weeks ago and will likely start another one in November. In the meantime I’ve got the opportunity to do what will likely be a weeks work for a client in London.

As it’s just a short term engagement, any advice on what is standard practice for invoicing? I’ll need to fly down at the start of the week and will have expenses for fuel, airport parking, flights, trains, hotel, food etc. Is it better to bundle it all into a day rate or should I agree a standard day rate for my industry and then advice that I will bill expenses separately?

Also, as I don’t have a Ltd company, can I just invoice them as a sole trader and get paid into my personal bank account and add it as additional income in a self assessment?

Any help and guidance would be appreciated.

I’d go with the open book quote, (option 2).
Easier to be straight-up if the client knows you’re not used to contracting.

Yes, you can just put the money into your account and declare it when you do your assessment.

Keep receipts for everything.

APF

Get the expenses done separately and then you can (probably!) ignore them for tax purposes. That’s assuming they are legitimate and reasonable of course.

I think if it’s under some limit (£2500?) you can ignore it for tax purposes (but this is not qualified advice). Obviously depends on whether it is really just a week (and what you are charging!) or likely to continue in some form.

A rate for time and then expenses on top is probably the norm. Other thoughts below…..
Consider how fast they will pay, do you need to add a margin to expenses to cover paying out before receiving etc.
Do you charge for travel time/day or is in the work day?
Do you charge an hourly rate or daily?

I don’t think you’re allowed to operate as a sole trader for contract work
– certainly not if you’re doing an IT contract. For that amount of time i’d go with an umbrella company like orangegenie, parasol, or <insert name of parasitic vermin here>. Bear in mind they are all crap.

I think the reason why everybody runs a limited company and not sole trader is that in the days of old there was a case where somebody did not pay the due tax and it was found that the client was therefore liable to pay. Thus everybody now has to use limited companies.

(Hopefully my recall of this is correct)

For one week?

Last time I charged for my time on an ad-hoc basis (about a day) I just took cash in hand. So sue me. It really was a day, not an ongoing pattern of business. Just agree a fee and get on with it. It’s no more complicated than your kids mowing a few lawns for pocket money.

It’s possible the client might demand more but that’s a matter for their admin and procedures.

Thanks for all the replies.

I doubt I’ll charge for travelling and it will be a fairly standard day rate. Sounds like the consensus is to advise of my day rate and that expenses will be an additional amount.

hot_fiat – Member

I don’t think you’re allowed to operate as a sole trader for contract work
– certainly not if you’re doing an IT contract.

It is an IT contract. I’m trying to reduce the hassle involved in this as it’s likely a one off. Do i really need to go through an umbrella company?

also depends somewhat on your client and what their governance structure will allow them to pay.

Do i really need to go through an umbrella company?

No.

If you are a sole trader, you are exactly that.

hot_fiat – Member
I don’t think you’re allowed to operate as a sole trader for contract work
– certainly not if you’re doing an IT contract.

How does that work? A contract is a contract. I have a contract with my window cleaner, it’s a verbal one but a contract.

What’s the difference? Why would “IT” be any different? Some contracting Companies might have their own rules but that’s up to them.

Dave’s right, the agency or client became liable for the non-payment of tax by the sole trader. So agencies no longer (or very rarely) take them on.

There’s also the massive risk factor. You screw up a system as a shareholder of a limited company & you get to just liquidate the company walk away & have a chuckle about it. Screw it up as a sole trader & they can come after you.

It is an IT contract. I’m trying to reduce the hassle involved in this as it’s likely a one off. Do i really need to go through an umbrella company?

no you dont , if the client will agree to it, then payment into your personal account is perfectly fine. Most clients wont do that though, hence the need for umbrella or ltd co.

Have a chat with them, if they’re happy with paying into a personal account you’re fine.

Day rate plus expenses.
Sole trader is fine so long as your client is happy.
Bank details on invoice – no need to advertise its a personal account. If they don’t like that then a separate account as a sole trader might be regarded as better practice. You’ll be long gone by the time that’s set up though.

Umbrellas are sort of fudging the employment relationship in longer term contracts, but I can’t see a need for one here (actually I don’t see the need at all, but that’s another discussion). One reason you are not an employee is that you hold the risk (and upfront costs) for the expenses.
(edited for clarity)

Ltd would separate you and your business liabilities, but seems like overkill for a week’s work.

Sole Trader status needs setting up too, but if you already do Self Assessment its not too much of a drama.

https://www.gov.uk/set-up-sole-trader

If you’re going to be working on a live trading system, I’d go umbrella + prof indemnity insurance. If it’s run of the mill IT work, I wouldn’t bother.

Sort out how you will invoice them etc. and get sign off from somebody authorised to sign off before you start!

Sole trader info if you go down that route.

https://www.gov.uk/set-up-sole-trader

Thanks again for all of the replies. I’ve got a call with them this afternoon so will go with the day rate + expenses and see what they say regarding the invoicing process and payment.

Beware the response on the expenses may depend on: 1. how desperate they are for YOU to do this.; 2. whether they approached you or vice versa. My starting position is usually that ‘the work is here, and we will pay the going day rate’ if you chose to base yourself somewhere else that is your decision (and you possibly benefit in other ways like lower house prices, better quality of life, access to a different range of clients etc. So, to me, the cost of you getting to our facilities is your cost. Any suggestion we may pay travel time is also usually rebuffed, unless you can prove you are working exclusively for me on that time – e.g. writing a report etc.

Obviously if you have a very specialist set of skills, or availability, you may get to dictate the terms.