TAX

Making it Big – But starting off small

Self employed freelance.

High proportion of us will follow this route. Working in this sector not working in this sector. A variety of ways to engage with this topic. To be prepared to know about the areas that we could be facing. Administer.

Either a product or a service. We are Entangleable asset. It’s important to manage that relationship. We are the service we need to manage with the client the best.Not always the best animator that gets the work but those who can work with people that secure that work.

Service driven industry, secure work how? To deliver that result (us working in animation).

 

You can take a job for less then this, if you consider it as an investment for the future progression. But think about where you can cut in your life.

Freelance / business

Hospitality is going put for coffee

Meetings

 

Minimum turnover our business can take

PERSONAL + BUSINESS EXPENSES = TURNOVER

And then your daily rates is?

3000 pounds a month

Weekends = 104

Bank holidays = 9

Holiday = 20

Contingency / sick days = 5

So actual amount of days = 227 from a year 365 days

  • 160 pounds a day
  • 100 – 120 pounds a day
  • After two days 250 a day
  • Graduates = 120 a day
  • And then per hour
  • Daily rate
  • Amounts of hours

Market price will determine whether we will increase the price or not. Factor in raw costs. Can you make enough to cover all your costs. Increase costs on more days. How to deliver the price to the clients

Don’t ever undercharge!!!

It all depends on the market are we unique? The cupcake – barometer of the true market. How we market ourselves like that cupcake, how expensive and luxury are we.

INVOICES

 

Date

Your details

Customer (details)

Supplier details

Describe work

Amount (due – total)

VAT (earn 83,000 add VAT to total)

Total due

Copyright (claim on the invoice – who does this work belong too) offer to sell it, license it or keep it. In the contract for the company. Work belong sot the employer.

Payment terms and details (30 days credit… till they pay)

Offer discounts for early payment

Limited company number

 

The invoice is Legally binding, can play around and add discounts for work if the money is paid in advance. Money on delivery / Money in 14 days, It’s up to us

 

TERMS AND CONDITIONS ON THE INVOICE

All copyright and intellectual property belongs to … (us unless stated)

Deposits and total projects costs that are less that £400 must be paid in advance

The project commencement ate in order for the work to begin.

Not paying before the agreed advance date will lea to a delay.

All other payments are due within 30 days of the invoice date.

 

  1. Payments should be made via bank transfer to the following account
  2. Account name: sort-code: Account Number:
  3. IBAN: SWIFT
  4. IMPORTANT: We do no accept cheques
  5. .. If you are a limited company registered in England and Wales
  6. Company number 070948308
  7. Thank you for working with us.
  8. Fell free to send any questions through billing@

 

What happens if it all goes wrong?

  • -Reminder
  • -Email / Phone call
  • -Wait reasonable time
  • -Repeat (4 five days)
  • -Then you need to make a calculation on whether you want to do business with them again?
  • -Friendly reminder (send a copy of invoice.) Keep a file of all the emails along side the business. Evidence if it does go wrong.
  • 30 +1 days, call them up reminding it’s over due. Don’t trust them. Repeat again, send email. Not answering him.
  • Landline if he doesn’t pick up mobile. Remind him. Maximum of another 30 days. Then decide to take action.

 

THE SMALL CLAIMS COURT

  • Easy to do, either download or do it online.
  • www.moneyclaims.gov.uk
  • An guess what, the threat is often better than the actual
  • And even better, you can charge interest of 8% for late payments!
  • An reclaim your cost

 

Email the client and threat to take it to the small claims court – he should pay.

Interest at 8% APR daily

Fees

  • Dependent on amount you are claiming
  • And whether claiming on or offline
  • Remember you can claim them back as part of your costs.

TAX

FREELANCE / SELF EMPLOED / SOLE TRADER

Pay income tax on your profits through self assessment

Pay NI

Pay PAYE on any employees

May be best to use other freelancers so responsible for own tax

Can be self employed and employed at same time – N1 X 2

Register with HMRC within 3 months of trading, otherwise you will be fined.

 

DOUBLE NI for self employed and employed.

SETTING UP SELF EMPLOYED

You have to register in HMRC within 3 months of trading.

National INSURANCE

  • When your self employed you need to pay class BUCS on your income – 2.80 a week.

Less than 6 grand we do not have to may NI Contributions.

Also need to pay class 4 NICS on your profits.

RISK!!!
– if your business fails, you as the person will have to pay from your personal assets.

  • However most creative find this works as a flexible structure for low risks businesses.

PARTNERSHIPS

Two or more people set up I business together. Each partner is responsible for all the debts, even if cause by the other partners. Have a partnership agreement, what happens if one persons wants to exit. Rules behind Intellectual property. Negotiate on point of exit. Reduced amount for leaving 10%

Limited Company

  • Company goes bankrupt not us. We need to register company at company’s house.
  • Become this if we go in debt
  • Co-operatives
  • Community interest companies
  • Charities

 

INSURANCES

  • Product –  damage for something
  • Public – exhibition, shop, trade fair
  • Professional indemnity – legal claims against advice – if we are sued we need insurance
  • Content – theft
  • Legal – copyright claims
  • Life – are you responsible

VAT

  1. Turnover greater than 83,000
  2. Register if you think that you are going to do that turnover in the year
  3. Can ‘voluntarily’ register
  4. VAT is 20% tax on purchases and sales

Looks more professional – we are a larger company/individual

You are taxed on your profit

Keep records of all outgoings

Income minus outgoings = profit

Aim is to legally reduce your profit

And therefore pay less tax

Penalties are fierce for not keeping accurate accounts

OUTGOINGS (not profit)

  • Purchases
  • Rent
  • Salaries
  • Stock
  • travel

If you work at home.

  • We can claim a proportion of costs like:
  • Heating, electricity, council tax, mortgage interest, internet and telephone use, you’ll need to find a reasonable method of dividing your costs, e.g by the number of rooms you use of business or the amount of time you spend working from home.

Desk takes up to 25 percent of room, desk space. We can say this is our work space.

Workplace pension – obligation to employees to pay pensions (set up scheme).

The tax year

Ends on 5 APRIL, Paper based returns: 31st cover

Online return: 31 January following year

Online or paper need to pay an tax due by 31 January

If late…you will be charged interest…

Online is more secure, calculations done, tax due or owned, receipt.

TAX AND INCOME

Personal allowance is 11,00

Working tax credit if working 16 hours per week (if need help).

Basic amount is £1,960

16-24 with a child or have disability

Over 25 with or without child

HMRC WEBSITE for more indepth details on this issue.

 

Sector specific – business resources

  • Creative skillset
  • Animated women
  • Animation UK

www.ipo.gov.uk

(how to protect ourselves when posting our work online.) OUR RIGHTS

RIGHTS

  • Intellectual Property (we own the IP)
  • Copyright (we have created – not an idea)
  • Lasts life time plus 70 years we can pass it
  • Trademark (pay 5 years and then renew it)
  • Design right, 2d and 3d objects
  • Patern (unique design); no one else can produce this software

We have been ripped off. EVIDENCE all the sketches, Emailed it. Stolen our copyright.

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