When can you make invoices without being self-employed?

The crisis has changed many things in Spain. Many people are turning to self employment due to the scarcity of opportunities in the labor market. Some people invest all the money they made for their unemployment benefit in their own business, opening bars, restaurants, others open their businesses online, and some others come together to create a bigger business, even startups.

The problem arises when, in the case of Spaniards, and after several years living with the crisis, we have as a main consequence, after unemployment, an increase in self-employed workers, although not precisely as self-employed registered in the Treasury and Social Security. Carrying out small jobs that help us make ends meet, has become a regular, with extraordinary income that help with the domestic economy and that do not declare themselves.

And this against the will of the people, who wish to work in compliance with all Spanish self-employment laws. But the income is not always counted for a legal job to be profitable, or because the jobs are so sporadic, that signing up for a few days is absurd.
In these cases where you are not autonomous, many people wonder if could issue an invoice for the work they do, without any of these actions being illegal, because, we insist, people do not want to work outside the law.

Well, there is a possibility of being able issue an invoice without being autonomous, but you have to take into account certain points that are very important, to avoid unpleasant consequences.

Can I issue an invoice if I have a job? Can I do it if I am collecting unemployment benefits? Is there a minimum and a maximum to calculate it? We solve these doubts and some more related to billing without being autonomous.

Can I issue an invoice without being autonomous?

Generalizing enough, if the activity we carry out is secondary and is not our main livelihood, we could issue an invoice. For example, if you are a worker but in your spare time you are an artist, craftsman, creator, editor, photographer or any other activity that produces profit.
It must be remembered that when a main activity is carried out that is the sustenance of life, it is necessary to register in the RETA (Special Regime for Self-Employed Workers).

In order to issue invoices, it is necessary to be registered in the Census of Employers, Professionals and Retainers, otherwise we will be committing a crime. Anyone who registers in this census can issue invoices without being registered with Social Security.
The fact of not being autonomous and wanting to issue an invoice entails the obligation to pay VAT and personal income tax corresponding to your activity.

I am a worker and I need to make an invoice

If you are an employed person and need to issue an invoice, it must be taken into account that the total annual income does not exceed the SMI (Minimum Interprofessional Salary), which in 2016 is € 9172,80 (14 payments). In the case of overcoming it, we will find problems with the Public Treasury and the Tax Agency, even Social Security. They can fine us for a tax offense and Social Security can force us to pay the fees that have not been paid while we were billing.

If this amount is not exceeded, you are not obliged to register as a self-employed person, but you do have the obligation to declare this income and you even have to pay the corresponding VAT.

I am unemployed, can I issue invoices?

If you are unemployed and collect unemployment benefits, in this case, You CANNOT issue invoices and you are obliged to register as a self-employed person.
If you issue bills for unemployment benefits, they may stop paying you for unemployment benefits. A good tip would be to use what you have left as a subsidy and start a new activity as a freelancer, like the examples we mentioned at the beginning of the article

It is important to remember that even if you are unemployed you must be registered in the Census of Entrepreneurs, Professionals and Retainers to be able to issue invoices.

It is also strictly necessary to respect the maximum that you can enter for your activity, that is, not to exceed annual income in one year greater than the SMI that is indicated above.

Billing through a cooperative

Cooperatives help people who are not self-employed but carry out activities outside of their work or collect unemployment benefits. They mediate between the self-employed worker, advise him and offer various services.

When you need issue an invoice sporadically, the cooperative also offers its services. The final objective is that you can carry out a supplementary or sporadic activity and issue invoices. The cooperative will issue them on your behalf in exchange for a percentage of the total bill or a monthly membership, depending on the type of contract that is determined.

What advantages does a cooperative offer?

• The most striking is that you avoid the monthly self-employment payment, which in Spain is estimated at 260 euros per month (the € 50 'promotion' lasts only a few months, in the end you will pay the same as the rest of the self-employed).
• You free yourself from the expenses derived from the procedures for your activity
• By paying a small fee or a small percentage of what is billed, your business will be much more profitable

How does a cooperative work?

Through the payment of a monthly membership, cooperatives offer diverse services that cover different needs. You carry out the work and the cooperative issues the invoice in your name and then deposits the total of the invoice in your checking account, withholding the percentage established at the beginning of the contract.

• You will be able to invoice without having to be self-employed, paying the monthly self-employment fees only for the days you work, always through the cooperative.
• You save the freelance fee since billing is done through a third party and you do not need to be registered
• You receive advice at all times of the operations you are carrying out
• You save on administrative expenses and tax advice since they take care of everything themselves, such as the calculation of VAT, for example.
• They take care of the administrative procedures, so that you only dedicate your time to your work
• Some cooperatives even pay personal income tax for you if necessary.
• If you are unemployed and need to carry out an activity or sporadic work, a cooperative will register you for the days you need so that you do not lose the rights to the subsidy you are collecting.
• The cooperative will be in charge of registering and removing you from Social Security every time you start a sporadic or habitual activity
• Likewise, if you are an employed person and do some sporadic work, the cooperative will take care of all the paperwork.
You must bear in mind that cooperatives are a temporary solution, and you should not resort to them as a habitual means, we will see this point later.

General advice

When you work doing activities on a regular basis, try do not issue invoices with the same amount, so that the Treasury does not consider it as a habitual practice, which could lead to a sanction or fine for committing a crime.

If you are charging the unemployment benefitYou must take into account the days you carry out activities so that you do not violate the law and they withdraw the subsidy to which you are having access.

If any of the requirements set forth above is not met, it is possible that the Treasury will notice our extraordinary activity and will fine you. It is also possible that if all the obligations are not met, Social Security will force us to pay all the fees that we have not paid while we carried out the activity and issued invoices.

Remember that the obligation to the Treasury does not cease to exist and you must pay the corresponding VAT and personal income tax and the annual summaries of the activity carried out.

As if you were a freelancer, you have to make sure that the invoices are well filled out with all the required tax information. Try to save all the invoices for any need to present them to the Tax Agency.

Digital invoices are not valid unless they have a digital signature. Therefore, if you issue invoices in PDF format, they must be correctly signed to be valid, otherwise, use the usual paper invoices.

When to register as a freelancer?

We mentioned before that an excellent way to be able to issue invoices within the legal framework is through a cooperative, but that you should not have it as the usual means of work. Why?

The invoices will be in the name of the cooperative, and not yours, so it is not advisable to do it all the time.

When your recurring income (we insist on recurring) exceed the Minimum Interprofessional Salary plus 20%, is the best time. Why? The SMI is currently € 655.20 per month, and the payment to social security, without the flat rate, is € 256 (€ 52 the flat rate). If your VAT is 21% for each invoice… you will not earn any money at the end of the month. You must add a percentage of net profit to your numbers.

An excellent tool to calculate things, and to know whether or not you should become self-employed is the FreeLancer calculator, in addition, it will tell you how much you need to bill per month for the desired payroll.