The deposit will come under 2015/16 and the rest of the payment comes under 2016/17. While it does seem a little strange to do that, it's the only way to calculate your taxable income properly. Otherwise, you could pay more/less tax in one year that you should be.
Hi Dan - it will be a case of waiting to see what happens. It's highly unlikely that you will be made liable, mainly because you completely the work for the client based on their specifications. If they do try and turn the blame on you, chances are that it will not work. Your client was in charge of the project and therefore is liable. I'm obviously not saying that they definitely can't take action against you, but if they do they probably won't have much of an argument. Like you say, you don't agree with the business' view on the matter, so there's a chance that their complaint will be thrown out.
Have you signed a contract with them? If you have, take a look at it closely and see what it says about payment and the nature of your work. If you know someone who knows about contract law, get them to have a look at it too.
You should not get in trouble with HMRC as long as you declare all of your earnings and pay your tax and NI when they ask you to. I would say that you should keep going to your manager and asking him to rectify the situation. If he doesn't, then it could be time to find a new client. Luckily, there are quite a few sites where you can find freelance work, even in your particular niche. I would say looking for other work now while still working for this company is probably the best way to go.
During my time as a freelancer, I found the best thing is to be honest. If you have the time to do more work for the client and they offer straight away to pay extra, then you should go for it. If they ask for more work, then you can politely ask that they increase the money they are paying you. Chances are if you ask politely they will not be offended by the question. And forgive my bluntness, but if they do get annoyed and decide to end their relationship with you, then quite frankly they don't deserve your hard work.
It also depends on the volume of extra work they are asking for. As a freelance writer, I would let clients off if they asked for an extra 200 words or something like that. My general rule was that if it needed an extra hour's work (say 500 words upwards) then I would ask for remuneration. Whenever I asked politely and gently for it, they have always agreed and paid me extra. But it's entirely your decision as to where you 'draw the line' as it were.
