This page should answer any questions that you might have about self-bill, however please do not hesitate to contact Support if you have further queries.
1. What is self-billing
Self-billing has been operating for a number of years. It started with the automotive companies and is now widespread throughout service and industrial companies. Self-billing is an arrangement between a contractor (Supplier) and your agency (The Customer) whereby the agency prepares a contractor’s (supplier’s) invoice and sends it to the contractor (supplier). It means your Limited Company will no longer need to send an invoice to your agency. You submit the timesheet (and/ or expenses), it gets authorised by your manager and then your agency sends the invoice and follows it up with payment. Basically, it’s a much more efficient payment process for everyone involved.
2. What are the benefits of the Limited Company?
Self-billing is more efficient:
- They don’t have to produce an invoice
- It reduces the administration for both parties
- It removes any margin for error as the invoices are automatically created from the approved timesheets/expenses – it’s an end to end process.
3. Who makes the rules for self-billing?
HM Revenue & Customers (HMRC). The rules are set out in VAT Notice 700/62. You can find this on the HMRC website. Search for ‘self-bill’.
4. Does self-billing impact on my IR35 position?
Self-billing has no impact on your contractual or commercial arrangements between the Limited Company and your agency, and has absolutely no impact on IR35 considerations.
5. Who designed the invoice format and layout?
The invoice format is a standard format that conforms to HMRC regulations and this cannot be changed. The invoice will show full timesheet detail (and expenses where applicable) and copies of the timesheet and expenses is attached.
6. Can anyone use self-bill?
Self-bill is only used for contractors working through a Limited Company. It’s not relevant if you are a PAYE worker or student.
7. Is the agreement with me or the Limited Company?
The agreement is between the Limited Company and your agency.
8. The Limited Company changes VAT registration number, what do I need to do?
If a Limited Company has changed its VAT registration number or recently become registered they will need to send you a copy of the new VAT certificate. You will we then need to provide a new Self-Billing agreement.
9. The Limited Company has changed its name, what do I need to do?
If the Limited Company has changed its name BUT maintained the same VAT number, they will need to send you a copy of the change of name certificate issued by the Registrar of Companies. There is no need to sign a new Self Billing agreement. However if both the name AND the VAT number have changed you will also need a new Self Billing agreement.
10. Company has now de-registered from VAT.
If the Limited Company de-registers then they will need to inform you and complete a new Self Billing agreement.
11. Their system is set-up to provide invoices, how will they cope with self-bill invoices?
Instead of providing their own invoices, they can use the self-bill invoices as part of their Limited Company’s accounting records. This is accepted by HMRC for VAT purposes. However, we recognise that they may have their own system to provide invoices. If they want to continue to do this, we suggest they produce their invoice but do not send it to you; instead attach it to the self-bill invoice.
12. When will their self-bill agreement expire?
There is no expiry date. The self-bill agreement will run alongside your Contract Schedule term.