[UK] Pros and cons of self billing for first time contractor?


3

I've just started my own company and I'm initially contracting - I've been asked if I want to send invoices, or do self billing. I've had a look online and I can't see any reason not to self bill, but was wondering if anyone can explain the pros and cons to a non business/financially minded individual.

Finance UK Billing

asked Apr 26 '11 at 18:46
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Martyn
128 points
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3

It's a while since I've contracted, but self billing shouldn't of itself be a problem, for example see the VAT Page on self billing, but due to IR35 you are trying to accumulate as many indicators of "being in business on your own account" as you possibly can.

Sending your own invoices was one of the items that was always advised as being an indicator.

So if you're hoping to be IR35 exempt, I'd still be inclined to send my own invoices.

Obviously the key indicator is the contract, but the Revenue have made some odd decisions on IR35 status in the past, so the more you can do to indicate exemption, the better. Don't forget IR35 is a set of tests applicable to no other business apart from contractors, so common sense does not apply.

answered Apr 26 '11 at 21:11
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Matt
2,552 points

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