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Around half a year ago, I performed a freelancing service for a client worth just a few hundred dollars. I did it as an individual and he paid me as a company, but I planned(and told him about it) on registering UK LTD and billing him as a company(he needs a proper bill/invoice for his accounting).

Now after some research, I am not sure if I can just open a new company and give him a proper bill for something he already paid 6months ago(the company wasn't formed yet). Can I? If not, what other options do I have? Can I bill him as an individual, say by giving him backdated invoice from hubstaff?

  • I do not understand. You state "he paid me..." So, why would you be invoicing him again? – Scott Jun 18 at 18:34
  • He transferred me the money, but I didn't give him a proper bill/invoice at the time, as we agreed I will do it at a later time(lack of knowledge on how things work from both of us). – Nema Ga Jun 18 at 18:42
  • Okay. I'm in the US. So, I don't know about UK laws/taxes. (or I'd post this as an answer) In the US, just send any invoice and mark it as "PAID". He would merely need a record of the money he paid and it would make absolutely no difference if it was paid to an individual or to a company for him. It might matter to you though. Income as an individual can be seen as different than income for a company - but again, to him... makes no difference. – Scott Jun 18 at 19:56
  • If they've already paid you why do you need to send them another invoice at all? Is this for tax reporting purposes? – joeqwerty Jun 21 at 21:25
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I am from Germany but I expect the rules are similar in UK. If you want to know it for sure you should ask a tax consultant.

In Germany you have to mention the delivery date on the invoice and the customer has to consider this as well. You can not send an invoice as a LTD that did not exist at that time. If you do it differently you might face problems in an investigation because the fake invoice of today would need to have a real payment. If authorities would care, I do not know.

This means to my knowledge the only solution is that you send him a private invoice from the date you did the job with no VAT, etc. He can take it into his bookkeeping to balance the costs but not deduct the VAT of course. You have to declare the income as indepently earned income in your tax report.

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