Advice needed on invoicing

kanzen

kanzen

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Over the past year and a half I've been doing freelance work for my previous employer, billing them as a freelancer. However, since I've lost out on some major contracts, due to being a freelancer, so I thought it would be best to register a business...which is now done.

When it comes to sending an invoice (I used to have 25% tax deducted) will they now pay the full amount, allowing me to handle the taxes?
 
kanzenj said:
Over the past year and a half I've been doing freelance work for my previous employer, billing them as a freelancer. However, since I've lost out on some major contracts, due to being a freelancer, so I thought it would be best to register a business...which is now done.

When it comes to sending an invoice (I used to have 25% tax deducted) will they now pay the full amount, allowing me to handle the taxes?
Click to expand...
You could be classified as a Personal Service Provider by SARS if one of the following apply:
  • the person would have been regarded as an employee of the client, if the service was not rendered through an entity
  • the person or entity rendering the service must perform such service mainly at the premises of the client and such person or entity is subject to the control or supervision of such client as to the manner in which the duties are performed
  • more than 80% of the income derived from services rendered is received from one client or associated person in relation to the client

The above will result in 28% tax being withheld by your customer, and limit your deductions.
 
-SBS- said:
You could be classified as a Personal Service Provider by SARS if one of the following apply:
  • the person would have been regarded as an employee of the client, if the service was not rendered through an entity
  • the person or entity rendering the service must perform such service mainly at the premises of the client and such person or entity is subject to the control or supervision of such client as to the manner in which the duties are performed
  • more than 80% of the income derived from services rendered is received from one client or associated person in relation to the client

The above will result in 28% tax being withheld by your customer, and limit your deductions.
Click to expand...

On this topic, what if you employ someone else - will you be able to qualify as a small business?
 
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