Whether or not you do freelancing, you should always make sure that you are working within the legal boundaries defined by your country. Companies mostly save their employees from this headache and cover this aspect on their own. But freelancers, who are obviously self-employed, have to face some complications when it comes to being at terms with the laws of their state. Above all, they have to make sure that they pay taxes according to their income. Taxes play a major role in the smooth running of a country. It is everyone's national duty to pay a small percentage of their income as tax, and not doing so is considered a crime. In the past, freelancers usually got away with tax evasions, but recently, a large number of self-employed workers have been convicted of this as a result of a recent crackdown in UK
, and the government has turned its attention towards ensuring a higher tax return from the freelancers.
It is quite essential for a freelancer to know fully about the tax rates of their country and have a clear idea about how much tax is owed to the state. If you client is not the end user of your services, it is also equally important to let the client know about the amount of tax to be paid. This can be done by sending them a Tax Invoice
. A tax invoice is designed to specifically list down the taxable amount to be added to the total charges, which is a small percentage of the total amount charged. This is different from a Retail Invoice
, which lists the payment demands to the client. However, it is up to the worker if he wants to use the same invoice for both purposes. The other differences between the designs of these two invoice types and the fields contained in a Tax Invoice can be seen here
Besides sending the invoice to your client, it is also important to keep a copy to be submitted to the state department for tax collection along with your taxes, which act as support documents and can be cross-checked to authenticate your tax payment. This is how you can add tax to your freelance invoice
When it comes to tax invoice designs, Bonsai offers you exactly what you need. With invoices designed exactly according to present requirements, you certainly don't need to design the invoice on your own. So use Bonsai's designs for your Tax Invoice
and make yourself a responsible citizen of your country.