(edit title) Running a small side business Writing invoices without a corporation Options

[elk200]

Hi everyone,

perhaps you can help me with something: I have a full-time job in Sweden, but I also run a small website (only privately so far). I have now been offered some money to promote content and links etc. on my website. In total, this could amount to roughly 10,000 kr per year. Nothing big, I know, but very intriguing.

I have informal permission from my boss to have this "side business", so that's fine. However, what do I need to do to legally be able to earn money with this? Is it possible to write invoices as a "freelancer" without registration? (I know I could found an AB, but given the amount of revenues I'm expecting that seems far too complex.)

And can I then just include this in my tax return for 2012 next year, as "self-employed work income" or so, on top of my employment income? (Which tax rate would be applied - the same marginal tax rate as on employment income?)

If it makes any legal/tax difference for invoicing: The interested party (who wants to pay me) is located within the EU, but outside of Sweden.

Any advice or hint where I can find more info is appreciated!

[PDX]

There are tons of companies that specialize in invoicing and handling taxation etc on freelancers' behalf. Search for " fakturera utan företag" .

~~~PDX~~~

[captainbirdseye]

Hi,

You could probably set up a sole trader, as I have done this previously with consultancy work.

I'm in a similar situation and about to embark on my own side project with a demo client in the UK. I will only be provided with a small fee and their input whilst I continue to work full time.

I'm wondering if any investment I put into this project is tax deductible from my full time job?

[elk200]

There are tons of companies that specialize in invoicing and handling taxation etc on freelancers' behalf. Search for " fakturera utan företag" .. ~~~PDX~~~

Thanks, but that sounds like it costs money and with revenues of 10,000 kr (and possibly even a bit less) that doesn't seem appropriate.

Setting up as a sole trader seems the way to go, however, is there any way I can get around VAT? Is there like a minimum revenues I have to hit (like in other EU countries), or will I have to handle VAT even at that low level?

Thanks!

[PDX]

Thanks, but that sounds like it costs money and with revenues of 10,000 kr (and possibly even a bit less) that doesn't seem appropriate.

It is exactly the most appropriate with small revenues. Do you really want to spend your time on such small sums?

I would say six figures yearly is the minimum to bother with the paperwork yourself.

~~~PDX~~~

[skogsbo]

I think you just need to have a read up on the skatteverket site to get all the detail but I skim through it below.

You register with SV for FA tax status, which means that you have income from your employer that will be taxed normally, but that you'll also have you own income and put in returns. F skatt is purely for those self employed.

Forget the sole trader/ partnership etc. terminology, you don't have to register your business for being solely employed, unless you are trying to protect the name etc. Just register as having an additioniol income that is generate by yourself. You then do the declaring.

MOMs, you can pay this or claim it back according to how you annual MOMs balance works out. You can register to do MOM account specifically or if below a given amount you can merge it with your standard return. At your turnover, it is clearly far easier to merge. Big business, do MOMs seperate and monthly, but it depends on which way the MOMs flow is greatest for you really.

Invoice, if your turnover is little, how much invoicing are you doing, can't you just do it yourself? If you are using online stuff, paypal etc. how much paper invoicing and giro-plus work is there likely to be?

EDIT - there are loads of information sheets on SVs website in English, although some of the forms will be only in Swedish, none are complex. I would read every line of them, as there will be stuff you can claim and limits on others.

[Bender B Rodriquez]

For such small sums you should not register a company of any form. Instead you should declare it on your tax form as "hobby income". You can do this if your main purpose of your site is not to create profit. Also, since the income is less than 30k you do not need to pay MOMS.

http://www.skatteverket.se/blanketterbrosc...f680007485.html

[james5]

You can search on google and get the important info about the business you want to start.

[Gordy]

I can't vouch for the accuracy of this but I was once told that you are not taxed on "hobby income" up to 10,000kr. but if you go over that by just 1kr. you pay tax on the whole lot.

Might be worth your while checking that out if it's true although the notion that the Swedish state lets you earn money without having to pay tax on it seems a little unlikely!

[elk200]

Bender, thanks, I guess "hobby income" will be the appropriate treatment of the matter.

Does an invoice/kvitto in this context need to meet any specific legal criteria? What must it contain?

[Taxalien]

From what I have seen before, if you declare this as an hobby money it will probably be taxed at 97%.

It has to do with how jobbskatteavdraget is calculated (I believe).

There was a blogger who discovered this when he, just like you are doing, decided to declare the income. When he entered that in the tax calculator he notices that what he had earned was taxed at 90+%.

Maybe you can try it out yourself now and not get shocked later.

EDITED:

added link. It was more. 99.7%

http://sparsamtleverne.blogspot.se/2009/04...t-till-997.html

[elk200]

Blimey... Is this for real? It seems to be a bit more complex, though: http://sparsamtleverne.blogspot.co.uk/2010...on-adsense.html

[skogsbo]

Many hobby incomes aren't taxed, like beekeeping, or rather honey sales. At what scale a hobby becomes a business I don't know, yet.
I would just go to SV and ask them, just don't commit until you know the facts from them first, as for 90+% sounds like an error?

[Bender B Rodriquez]

Bender, thanks, I guess "hobby income" will be the appropriate treatment of the matter.. Does an invoice/kvitto in this context need to meet any specific legal criteria? What must it contain?

Hobby income is counted as salary income and you will pay taxes accordingly, however you do not need to worry about MOMS or about keeping books; you only need to save your receipts/pay slips. If you actually send invoices it sounds to me like it is more advanced than "hobby income" since it could violate the non-profit principle so you should check it up. (It is hard to motivate that you business is not primarily for profit if you send invoices.)

[Yorkshireman]

At what scale a hobby becomes a business I don't know, yet.

It's not about scale, it is about intent. If it is run to make a profit, then it is not so much a hobby but a business you run in your spare time.

Here is a little info (in Swedish) with regards earning income from affiliate programs, directing traffic, on the net, on Skatteverkets website:

http://www.skatteverket.se/privat/skatter/...2fa8000790.html