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Quick overview and checklist for you who have to send an invoice as a private person
In our guide below, we dress you up for what you should bring when you want to write an invoice as a private person?
If you've landed here because you just want to get your hands on our invoice template, you can download it here. We have ensured that it meets all requirements.
Whether you are going to send an invoice to your first customer or not, there is unsurprisingly a whole lot that you need to be aware of. We have created a guide for you who have to send an invoice as a private person - or are considering whether there could be alternatives.
Can you invoice as a private person?
Det korte svar er ja! Og du har flere muligheder. Du kan enten lave din egen faktura fra bunden. Brug da vores tjekliste her på siden for at få det hele med. Eller du kan downloade vores fakturaskabelon, som vi har sikret lever op til alle gældende krav. Vil du helt slippe for det administrative bøvl med at sende faktura, så sign up og send din faktura gennem Factofly.
Everything you need to be aware of when invoicing as a private person
We have collected all the things you need to be aware of when you write an invoice as a private person.
There are some things you have to keep track of when you send an invoice as a private person, so to make it a little easier for you to find your way around the many pieces of information, here is an overview.
Contents:
Alternative to invoicing as a private person
When you are faced with sending an invoice as a private person, you basically have two options:
1. Do it yourself:
As with so many other things in life, you can of course manage things yourself. In the guide below, you can read about everything you need to keep track of when you want to invoice without having your own CVR number. It's a longer matter, so we won't spend too much effort on that part right here.
2. Done for you:
Your other option for invoicing without your own company is to also use Factofly. With Factofly, you handle your customers and your work yourself, but use our self-serve platform to invoice and get paid.
We handle the heavy administrative burden, and you can focus on doing what you do best.
What exactly can Factofly do, how does it help you, and why are we the right alternative for sending an invoice as a private person?
We have made a small comparison of the different alternatives you have. After all, you can always do things the hard way and get one CVR number as a freelancer, but we are no longer writing 1993, and there are smarter solutions for you.
1. Insurance
There are at least two types of insurance, and maybe even three, that you have to keep track of when you write an invoice as a private person:
Liability insurance
Liability insurance is if you cause damage to other people's things or people. Personal injury in particular can trigger very high compensation claims, so it is important that the insurance is in place.
You may already have liability insurance in connection with your contents insurance. It varies from insurance to insurance, but most private liability insurance does not cover during the performance of business.
This means that when you do something for which you send an invoice, you are actually carrying out a business, and your insurance does not cover it.
Accident insurance
Accident insurance covers you if you yourself are injured. Just like with liability insurance, there is a difference from insurance to insurance, but the vast majority of accident insurances only cover you in your free time, and not when you carry out business.
If you are injured while carrying out the work you are invoicing for, you will not receive compensation for lost working ability and the like. It is therefore important to check that your accident insurance covers you full-time, i.e. also when you carry out your profession.
Advisor insurance
If you advise your clients, it may be necessary to have adviser insurance, in the event that adviser liability arises in connection with the advice you have given.
Checklist for insurance:
- Check whether your liability insurance covers during the performance of business
- Check whether your accident insurance is full-time
- Alternative sign business research, price approx. DKK 1500-2500 per year.
- If you carry out counseling, a advisor insurance also be required
This is how Factofly covers you
When you work on a task through Factofly, you are covered by our liability and damage insurance as well as adviser insurance, so if an accident happens you are automatically covered.
2. Tax
When you write an invoice as a private person, tax is not settled on the money you receive. You must therefore settle your tax yourself. Put any 50% aside, or pay your tax continuously so that there is no unpleasant surprise later in the form of an unforeseen residual tax.
How to report your income for tax:
Either your customer reports the amount they transfer to you to Tax as b income.
If the company does not report your income as b-tax, you must do it yourself. You either add the amount to your advance statement, or you correct your tax return for the year in which you have income.
Regardless of which option you choose, remember to take into account the tax that remains to be paid, so that there is no unpleasant surprise later on.
Tax checklist:
- Does your client report your income as b-income or do you have to do it yourself?
- Take into account that no tax has been paid on the money you receive. Put any aside or pay in continuously.
This is how Factofly manages your taxes
When you use Factofly, we report and settle your tax. The money you get in your account is completely ordinary salary, so you can use it without having to worry about a tax bill later.
3. VAT and amount limits
As a private person, you should not have VAT on your invoices. The exception is if you sell for more than DKK 50,000 per year - then you must be VAT registered and have a CVR no.
How VAT is handled through Factofly
There is no upper or lower limit to how much you can do invoicing as a private person with FactoFly. You therefore do not need to be VAT registered, even if you exceed DKK 50,000 per year.
4. Expenses
You can deduct operating expenses from your income. It is defined as "expenses incurred to acquire, secure and maintain the year's income". This means that your expenses must have a direct correlation between your expenses and the income for which you send an invoice.
You cannot have a "deficit" in your b income, so your expenses must not exceed your income.
Deductions
Certain expenses are only partially deductible. For example, if you use your equipment 50% in connection with your b income and 50% in private, you may only deduct the 50%.
Since you are not VAT registered, you cannot get a refund for your purchase VAT.
REMEMBER!! That all expenses must be documented, including their relevance to the income you have. Remember to save all attachments.
Checklist for expenses:
- Save all your attachments
- It is you who must document that your expenses are relevant to your income
This is how expenses are handled through Factofly
When you use FactoFly, you upload your attachments. Then we make sure that they are deducted from your income before tax is deducted. Because we are VAT registered, you also get a deduction for the purchase VAT. We also check that the annexes meet the requirements from tax.
5. Driving
Driving allowance
Driving allowance is a tax-free allowance for the kilometers you drive in your own car, motorbike, scooter or bicycle in connection with your business. You cannot be paid tax-free driving allowance when you receive your fee as B income. If you invoice your customer for driving, you will be taxed as ordinary income.
The rates for tax-free driving allowance are DKK 3.52 per km (2022 rate, first 20,000 km.)
Driving deduction
Driving deduction is a deduction you get when you drive your own car, motorbike, scooter or bicycle to and from your job. The first 24 km per day does not trigger a deduction – from 25-120 km. per day triggers a deduction of DKK 1.96 per km. (2022). You must document and enter your driving in connection with either your tax return or advance statement.
Checklist for driving:
- Remember to keep a log of your driving. You must enter what the odometer read at the start and at the end of the trip, the total number of km and what the purpose of the trip was.
How to handle driving through Factofly
You have the option of getting a tax-free driving allowance by using Factofly. This way you get paid for all the kilometers and not just what is over 24 km per day. In addition, you can also have it paid out tax-free. Contact us to hear more about the possibilities.
6. How do you make an invoice as a private person?
Setting up an invoice as a private person is a relatively simple process. We have created an invoice template that complies with the legislation, which you can download completely free of charge.
If you throw yourself into creating an invoice, you must remember to pay attention to what your invoice should contain. Follow the checklist on this page to make sure you get everything.
Template for invoice
When you write an invoice, there are a number of requirements for information on the invoice. We have created a template that meets all requirements. It is in an editable PDF so you can fill in the information and save it locally on your computer. You can send the invoice to your customer, either as an email attachment or as a print on snail mail.
You can download a free invoice template directly from this link.
How to invoice through Factofly
If you do your tasks through Factofly, you don't have to do invoices, accounting, etc. yourself. We send the invoice for you and pay you the usual salary for the task.
7. Especially for you who are on unemployment benefits
You can invoice up to DKK 50,000 per year in your CPR number - it's called Leisure Activity. After DKK 50,000, you must create a CVR no.
This is how you will be offset
You will be offset hour by hour on your daily allowance card for both invoicing with CPR and CVR. When you invoice in CPR, you do not earn new unemployment benefits. With CVR, you earn unemployment benefit - it can be counted after the end of the financial year, i.e. around May.
When you create a CVR no, your unemployment benefit entitlement is shortened to 30 weeks (less if you have already used up your supplementary unemployment benefit). The 30 weeks count for each week from when you have created a CVR number - the exception is if you do not receive unemployment benefits for an entire calendar month.
B-Honorary
You can also receive a so-called b-fee for an assignment. Work with b-fee is considered ordinary work. Here, your fee is calculated for hours based on a set hourly rate in relation to how many hours you are offset against unemployment benefits.
The conversion takes place according to the Danish Agency for Labor Market and Recruitment's rate as per 2022 is 247.53. DKK per hour. If you earn DKK 10,000 from your assignment, you will be set off (10,000/247.53) 41 hours in unemployment benefits.
Remember to have documentation for your work, which you must send to the unemployment fund.
How to use Factofly on unemployment benefits
You get an employment contract and FactoFly reports the number of hours you actually work to the Tax Office, which forwards it to your unemployment insurance fund. So if you invoice DKK 500 per hour for 20 hours (DKK 10,000), then this is what we send to your unemployment fund. This means that you will be offset against the actual number of hours you have worked, namely the 20.
Your working hours count towards your unemployment benefit right away.
There is no maximum on your income when you work freelance through FactoFly while you are on unemployment benefits.
8. If your customer does not pay
It can be a little uncomfortable if your customer not paying. You want to maintain the good relationship and get them as a customer again. Maybe you still work for them. It may feel easiest to do nothing, but our experience is that the longer time goes by, the harder it is to get the money. And most often it's just an oversight on the part of the customer, which is quickly put right when you remind them of it.
Start with a friendly reminder
When you send an invoice as a private person, start by sending a friendly reminder, and follow up on the phone as early as 1-2 days after the payment deadline. If you still do not receive the payment, follow up with another reminder and possibly a reminder fee. If you have applied a reminder fee, 10 days must pass before you can remind again with a fee.
Last option: debt collection and enforcement
If they still don't pay, then the next step is typically debt collection. The vast majority of debt collection agencies will not take such a case unless you pay for the costs before they start the case - and you only get them back if your customer pays.
Alternatively, you can submit your claim to the bailiff's court, and if your customer does not contest the claim, you can get the bailiff's help in collecting the money.
If your customer disputes the claim at the bailiffs' court, then you have to go through the courts to get their word that you are entitled to the money. The case will typically be able to be treated as a 'small case', which is cheaper than a normal case. However, court cases are very often fraught with a large amount of time and costs, so always consider it carefully before taking such a case further.
Checklist for non-payment:
- Jerk immediately. A friendly reminder kept in a good tone.
- Dialogue, dialogue, dialogue helps far more than a reminder. If the customer does not have all the money, make an installment plan.
- Claiming money from a bad payer is often associated with costs and a lot of time. Unfortunately, it is also far from certain that you will get your money, so always consider how far you want to go. Is your time better spent finding new paying customers?
This is how Factofly collects your money
When you use FactoFly, we handle all processes surrounding your customers' non-payment – right from the first reminder to the legal steps.
Quick overview and checklist for you who have to send an invoice as a private person
In our guide below, we dress you up for what you should bring when you want to write an invoice as a private person?
If you've landed here because you just want to get your hands on our invoice template, you can download it here. We have ensured that it meets all requirements.
Whether you are going to send an invoice to your first customer or not, there is unsurprisingly a whole lot that you need to be aware of. We have created a guide for you who have to send an invoice as a private person - or are considering whether there could be alternatives.
Can you invoice as a private person?
Det korte svar er ja! Og du har flere muligheder. Du kan enten lave din egen faktura fra bunden. Brug da vores tjekliste her på siden for at få det hele med. Eller du kan downloade vores fakturaskabelon, som vi har sikret lever op til alle gældende krav. Vil du helt slippe for det administrative bøvl med at sende faktura, så sign up og send din faktura gennem Factofly.
Everything you need to be aware of when invoicing as a private person
We have collected all the things you need to be aware of when you write an invoice as a private person.
There are some things you have to keep track of when you send an invoice as a private person, so to make it a little easier for you to find your way around the many pieces of information, here is an overview.
Contents:
Alternative to invoicing as a private person
When you are faced with sending an invoice as a private person, you basically have two options:
1. Do it yourself:
As with so many other things in life, you can of course manage things yourself. In the guide below, you can read about everything you need to keep track of when you want to invoice without having your own CVR number. It's a longer matter, so we won't spend too much effort on that part right here.
2. Done for you:
Your other option for invoicing without your own company is to also use Factofly. With Factofly, you handle your customers and your work yourself, but use our self-serve platform to invoice and get paid.
We handle the heavy administrative burden, and you can focus on doing what you do best.
What exactly can Factofly do, how does it help you, and why are we the right alternative for sending an invoice as a private person?
We have made a small comparison of the different alternatives you have. After all, you can always do things the hard way and get one CVR number as a freelancer, but we are no longer writing 1993, and there are smarter solutions for you.
1. Insurance
There are at least two types of insurance, and maybe even three, that you have to keep track of when you write an invoice as a private person:
Liability insurance
Liability insurance is if you cause damage to other people's things or people. Personal injury in particular can trigger very high compensation claims, so it is important that the insurance is in place.
You may already have liability insurance in connection with your contents insurance. It varies from insurance to insurance, but most private liability insurance does not cover during the performance of business.
This means that when you do something for which you send an invoice, you are actually carrying out a business, and your insurance does not cover it.
Accident insurance
Accident insurance covers you if you yourself are injured. Just like with liability insurance, there is a difference from insurance to insurance, but the vast majority of accident insurances only cover you in your free time, and not when you carry out business.
If you are injured while carrying out the work you are invoicing for, you will not receive compensation for lost working ability and the like. It is therefore important to check that your accident insurance covers you full-time, i.e. also when you carry out your profession.
Advisor insurance
If you advise your clients, it may be necessary to have adviser insurance, in the event that adviser liability arises in connection with the advice you have given.
Checklist for insurance:
- Check whether your liability insurance covers during the performance of business
- Check whether your accident insurance is full-time
- Alternative sign business research, price approx. DKK 1500-2500 per year.
- If you carry out counseling, a advisor insurance also be required
This is how Factofly covers you
When you work on a task through Factofly, you are covered by our liability and damage insurance as well as adviser insurance, so if an accident happens you are automatically covered.
2. Tax
When you write an invoice as a private person, tax is not settled on the money you receive. You must therefore settle your tax yourself. Put any 50% aside, or pay your tax continuously so that there is no unpleasant surprise later in the form of an unforeseen residual tax.
How to report your income for tax:
Either your customer reports the amount they transfer to you to Tax as b income.
If the company does not report your income as b-tax, you must do it yourself. You either add the amount to your advance statement, or you correct your tax return for the year in which you have income.
Regardless of which option you choose, remember to take into account the tax that remains to be paid, so that there is no unpleasant surprise later on.
Tax checklist:
- Does your client report your income as b-income or do you have to do it yourself?
- Take into account that no tax has been paid on the money you receive. Put any aside or pay in continuously.
This is how Factofly manages your taxes
When you use Factofly, we report and settle your tax. The money you get in your account is completely ordinary salary, so you can use it without having to worry about a tax bill later.
3. VAT and amount limits
As a private person, you should not have VAT on your invoices. The exception is if you sell for more than DKK 50,000 per year - then you must be VAT registered and have a CVR no.
How VAT is handled through Factofly
There is no upper or lower limit to how much you can do invoicing as a private person with FactoFly. You therefore do not need to be VAT registered, even if you exceed DKK 50,000 per year.
4. Expenses
You can deduct operating expenses from your income. It is defined as "expenses incurred to acquire, secure and maintain the year's income". This means that your expenses must have a direct correlation between your expenses and the income for which you send an invoice.
You cannot have a "deficit" in your b income, so your expenses must not exceed your income.
Deductions
Certain expenses are only partially deductible. For example, if you use your equipment 50% in connection with your b income and 50% in private, you may only deduct the 50%.
Since you are not VAT registered, you cannot get a refund for your purchase VAT.
REMEMBER!! That all expenses must be documented, including their relevance to the income you have. Remember to save all attachments.
Checklist for expenses:
- Save all your attachments
- It is you who must document that your expenses are relevant to your income
This is how expenses are handled through Factofly
When you use FactoFly, you upload your attachments. Then we make sure that they are deducted from your income before tax is deducted. Because we are VAT registered, you also get a deduction for the purchase VAT. We also check that the annexes meet the requirements from tax.
5. Driving
Driving allowance
Driving allowance is a tax-free allowance for the kilometers you drive in your own car, motorbike, scooter or bicycle in connection with your business. You cannot be paid tax-free driving allowance when you receive your fee as B income. If you invoice your customer for driving, you will be taxed as ordinary income.
The rates for tax-free driving allowance are DKK 3.52 per km (2022 rate, first 20,000 km.)
Driving deduction
Driving deduction is a deduction you get when you drive your own car, motorbike, scooter or bicycle to and from your job. The first 24 km per day does not trigger a deduction – from 25-120 km. per day triggers a deduction of DKK 1.96 per km. (2022). You must document and enter your driving in connection with either your tax return or advance statement.
Checklist for driving:
- Remember to keep a log of your driving. You must enter what the odometer read at the start and at the end of the trip, the total number of km and what the purpose of the trip was.
How to handle driving through Factofly
You have the option of getting a tax-free driving allowance by using Factofly. This way you get paid for all the kilometers and not just what is over 24 km per day. In addition, you can also have it paid out tax-free. Contact us to hear more about the possibilities.
6. How do you make an invoice as a private person?
Setting up an invoice as a private person is a relatively simple process. We have created an invoice template that complies with the legislation, which you can download completely free of charge.
If you throw yourself into creating an invoice, you must remember to pay attention to what your invoice should contain. Follow the checklist on this page to make sure you get everything.
Template for invoice
When you write an invoice, there are a number of requirements for information on the invoice. We have created a template that meets all requirements. It is in an editable PDF so you can fill in the information and save it locally on your computer. You can send the invoice to your customer, either as an email attachment or as a print on snail mail.
You can download a free invoice template directly from this link.
How to invoice through Factofly
If you do your tasks through Factofly, you don't have to do invoices, accounting, etc. yourself. We send the invoice for you and pay you the usual salary for the task.
7. Especially for you who are on unemployment benefits
You can invoice up to DKK 50,000 per year in your CPR number - it's called Leisure Activity. After DKK 50,000, you must create a CVR no.
This is how you will be offset
You will be offset hour by hour on your daily allowance card for both invoicing with CPR and CVR. When you invoice in CPR, you do not earn new unemployment benefits. With CVR, you earn unemployment benefit - it can be counted after the end of the financial year, i.e. around May.
When you create a CVR no, your unemployment benefit entitlement is shortened to 30 weeks (less if you have already used up your supplementary unemployment benefit). The 30 weeks count for each week from when you have created a CVR number - the exception is if you do not receive unemployment benefits for an entire calendar month.
B-Honorary
You can also receive a so-called b-fee for an assignment. Work with b-fee is considered ordinary work. Here, your fee is calculated for hours based on a set hourly rate in relation to how many hours you are offset against unemployment benefits.
The conversion takes place according to the Danish Agency for Labor Market and Recruitment's rate as per 2022 is 247.53. DKK per hour. If you earn DKK 10,000 from your assignment, you will be set off (10,000/247.53) 41 hours in unemployment benefits.
Remember to have documentation for your work, which you must send to the unemployment fund.
How to use Factofly on unemployment benefits
You get an employment contract and FactoFly reports the number of hours you actually work to the Tax Office, which forwards it to your unemployment insurance fund. So if you invoice DKK 500 per hour for 20 hours (DKK 10,000), then this is what we send to your unemployment fund. This means that you will be offset against the actual number of hours you have worked, namely the 20.
Your working hours count towards your unemployment benefit right away.
There is no maximum on your income when you work freelance through FactoFly while you are on unemployment benefits.
8. If your customer does not pay
It can be a little uncomfortable if your customer not paying. You want to maintain the good relationship and get them as a customer again. Maybe you still work for them. It may feel easiest to do nothing, but our experience is that the longer time goes by, the harder it is to get the money. And most often it's just an oversight on the part of the customer, which is quickly put right when you remind them of it.
Start with a friendly reminder
When you send an invoice as a private person, start by sending a friendly reminder, and follow up on the phone as early as 1-2 days after the payment deadline. If you still do not receive the payment, follow up with another reminder and possibly a reminder fee. If you have applied a reminder fee, 10 days must pass before you can remind again with a fee.
Last option: debt collection and enforcement
If they still don't pay, then the next step is typically debt collection. The vast majority of debt collection agencies will not take such a case unless you pay for the costs before they start the case - and you only get them back if your customer pays.
Alternatively, you can submit your claim to the bailiff's court, and if your customer does not contest the claim, you can get the bailiff's help in collecting the money.
If your customer disputes the claim at the bailiffs' court, then you have to go through the courts to get their word that you are entitled to the money. The case will typically be able to be treated as a 'small case', which is cheaper than a normal case. However, court cases are very often fraught with a large amount of time and costs, so always consider it carefully before taking such a case further.
Checklist for non-payment:
- Jerk immediately. A friendly reminder kept in a good tone.
- Dialogue, dialogue, dialogue helps far more than a reminder. If the customer does not have all the money, make an installment plan.
- Claiming money from a bad payer is often associated with costs and a lot of time. Unfortunately, it is also far from certain that you will get your money, so always consider how far you want to go. Is your time better spent finding new paying customers?
This is how Factofly collects your money
When you use FactoFly, we handle all processes surrounding your customers' non-payment – right from the first reminder to the legal steps.
