Explanation

Do you want to start as a self-employed person? The question is whether it is better to become a self-employed person by registering with the Chamber of Commerce or to have yourself paid as a freelancer. In 2020 it is no longer necessary to send invoices yourself, but you can also choose to be paid through a fictitious employment relationship, as a freelancer.

Difference between self-employed person and freelancer

Legally there is no difference between the two. At Sportverloning we make a distinction for convenience. We speak of freelancers who want to have everything properly arranged without the Chamber of Commerce and who are paid through fictional employment relationships and of self-employed persons who want to arrange everything themselves with the Chamber of Commerce. In that case too, you can send your invoices via Sportverloning, but you do bear a lot more responsibilities yourself.

Whether you are self-employed or freelancer: in both cases there is no relationship with your employer. You perform your work as an entrepreneur or as a modern worker through us. But how do you decide whether you want to work with or without the Chamber of Commerce? After reading these five steps you will know whether you want to make an appointment with the Chamber of Commerce or register with us.

Step 1: Registration Chamber of Commerce, registration Tax Authorities

A self-employed person must ensure that everything is properly arranged and that you have all the information that makes your work traceable. To do this, you register with the Chamber of Commerce and register with the tax authorities. You also apply for a VAT number and determine whether you want to use the small business scheme. Then you do not have to pay VAT, but you are also not entitled to tax benefits. In all cases, you must set up and keep records that can be retrieved by the tax authorities for seven years. That is why in most cases it is smart to immediately appoint an accountant who can at least issue your annual statement. You can often manage your VAT declaration yourself.

It does not matter how many employers you choose, or how often you change employer. You are in control and you only have to worry about the correct registrations that you often need as a care provider.

Step 2: Create a VAT accounting

Are you a maker or supplier, do you sell stuff or raw materials? In that case the law says that you "deliver goods". When you deliver goods, there is purchase and sale of stuff. For this you have to keep a cash book, from which you have to deduct the VAT.

If you provide services, you only have VAT accounting for your costs, such as a mail program, a website, public transport costs. For this, too, you must keep complete accounts and be able to show in a clear overview which costs you have incurred and deduct from your income.

Please note: this applies from the first day that you start your business. Many entrepreneurs go wrong because they only realize later that they have to keep this up to date and have lost all kinds of proof and receipts. If you do not submit your VAT on time, you can be fined by the tax authorities. It is often smart to call in an accountant and to use an accounting program.

Step 3: The DBA Act and bogus self-employment

Whether you are a real entrepreneur, the tax authorities determine on the basis of a number of criteria. If the tax authorities determine otherwise, your client will still be held liable for your taxes. With a Chamber of Commerce registration, bogus self-employment can therefore arise and the tax authorities can subsequently state that there is nevertheless an employment contract. When in doubt, your client runs the risk of additional assessments.

Step 4: Your Risks

We\ve just talked about it. With a Chamber of Commerce registration you and sometimes your client are responsible for the risks. Taking out any insurance is therefore certainly advisable, but also consider retirement.

Step 5: Tax benefits

When you sell services, you may be allowed to take advantage of tax benefits if the tax authorities see you as an entrepreneur for income tax purposes. We therefore call this an IB entrepreneur. You are an IB entrepreneur when, in short, you work as an entrepreneur for at least 3 days a week, have at least 3 clients, earn no more than 70 percent of your income with 1 client and advertise your company.

If you meet this requirement, the tax benefits are so great that you are often better off financially with a Chamber of Commerce registration. However, that is often not the case. No less than 80 percent of sole proprietorships are not an IB company, the tax authorities see the profit of these companies as 'result from other activities' and calls you a ROW entrepreneur (also a little less respectfully a 'hobby entrepreneur' mentioned). If you are a ROW entrepreneur, you are not entitled to the deductions, but you must comply with steps 1 to 3 and you are responsible for step 4.

Carefree entrepreneurship, it is possible

If you decide that you are ready for entrepreneurship in the form of carefree entrepreneurship, it is often useful to start via Sportverloning. With us you work from a fictitious employment contract where all taxes are well arranged for you and your client in advance. No matter how many clients you have, 1 to 100. You keep full control over your income.

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