going self-employed from 1st Jan.

Eurorunner

I plan on going self employed from the 1st January. Seeing as thats some time off, does anyone have any suggestions as regards stuff i could be doing in preparation for this?

Some background info...
the service offered will always be the same - one standard service at a set price. I wont be employing anybody - just operating as a sole trader.

What accounts software is best suited for this scenario?
I've worked self-employed abroad before but never in Ireland - so i'm not all too clued up on the tax side of things. Any suggested reading material that will fill me in on my basic obligations?

There is some equipment that I would like to purchase in advance of trading. However, if I do this, I take it there would be no way to offset this against tax in the 2007 tax year?

Any other suggestions welcome.

democrates

As I understand it you can do this:

You don't need to wait until 1 Jan to register for income tax as a sole trader, you can do it now. Buy your stuff, and record all transactions. Check out the cro site for details about the business name if necessary (you can register it online cheaply).

Then declare your business income(none this year) and expenditure(accounting software etc) to the tax man using a bp1 (=pdf) return, also including income and tax paid in your current job if you have one. That allows the revenue to calculate your correct tax liability which is their prime concern.

As you make a loss this year you can carry that forward to next year, and it will be taken into account for calculating your tax liability then. I'm not sure, but you may alternatively be able to offset the loss against other tax paid in the current year.

I've heard tell of 'pre-trading expenses' too, but I don't know how that works.

Eurorunner

Cheers for the info Democrates.

Anyone have any info on 'pre-trading expenses'?

It would be good to be able to avoid submitting accounts for 06...

democrates

Check out the bp1, it's like a regular tax return but also has fields for total income and total expenses for the year, no need for a full set of accounts let alone any audit. Just tot your expenditure on a spreadsheet and keep the receipts.

Eurorunner

Did a bit more digging on Revenues site and it seems all I need do is keep the receipts for items purchased prior to start-up

link

kluivert

You mentioned that you where going to set up as a sole trader.

Would you consider setting up as a Limited Company - more tax effective means of drawing money from the ie pension payments.

democrates

Eurorunner wrote:

Did a bit more digging on Revenues site and it seems all I need do is keep the receipts for items purchased prior to start-up

link

Excellent on a stick! That'll reduce my profit this year.

Eurorunner

kluivert wrote:

You mentioned that you where going to set up as a sole trader.

Would you consider setting up as a Limited Company - more tax effective means of drawing money from the ie pension payments.

Is there more paperwork/accounting necessary with a limited company?

This is the sort of info i would like to know more about. Surely there must be a book out there that covers the basic info/options and explains it in laymans terms?