If this will be your sole income for the year, going self-employed is the best way to do this:
- The US company can write your pay-check off as a standard expense
- Personal allowance from HMRC allows self-employed payments up to £7,475 tax-free
- Best of all, minimal administration: you can register with HMRC up to 3 month after you issue your first invoice. It's, like, having a demo version into freelancing: if it works out, great! If not, they don't even know you :)
So, here's how to go at it:
- Take the job, do it well, issue an invoice to the US company
- Payment-wise you can do IBAN international transfer, if you can negotiate the transfer cost to be the burden of the company; otherwise I'd go with Paypal -no plus international transaction fees.
- After the payment came through, register with HMRC (there's a short interview involved, but nothing that Joe Taxpayer can't hope through -all they want to make sure, is that you're registering because you're pulling cash in, and not for bogus reasons)
- Optionally, if you're certain this will be your sole income for the year, dissolve being self-employed immediately.
Total cash in: £2000
Total Tax paid: £0
Admin overhead: approx 3 hours.
Legit: 100% :)
Can you tell me that in my case what are the required fields on the invoice?
If you're non-VAT registered, there are no legal requirements as to what information you need to put on the invoice -it literally can be a couple of numbers on a napkin, and still be legit.
With that said, to make a professional appearance, my invoices are usually structured as follows:
- Header: trading name, registered address of residence
- Top line: INVOICE
- Date: [Date date of issuing]
- Invoice no: [client-specific, linearly incremented invoice number, eg. bigcorp-15]
- To: [name of client, or corp]
( Sidenote: why client-specific incremental numbering? Why, so they can't make educated guesses to the number of clients I have at any given time :) )
- From: [my name]
- NI number: [my NI number -as a unique identifier for my business]
- Table header: Date, Description, Amount £
- One row for each specific work done -either broken down into larger (multi-day) tasks, or aggregated into a single row
- Bottom line: Total contract work done: £amount
And so far, none of my clients missed any fields, so this should have everything they need to :)
Hope this helps, but keep in mind, all of the above is synthetic sugar on the top -ultimately, the relationship you share with your Clients is the thing you will (or will not) get paid for!
Edit#2: The voices in my head just pointed out, that I've totally omitted National Insurance contributions in the above. However, and I quote HMRC:
If your profits are expected to be less than £5,315 you may not have to pay Class 2 National Insurance contributions.
Hence, this won't change the numbers above, either -just make sure to point this out during your registration in the office.