Starting out as a sole trader i have a few questions

paulmbyrne1976

I am considering going down the Sole Trader route and as I have never done anything like this before I thought I would ask a few questions before I consider it

(1)Do I need an accountant.
(2)Do I pay Corporation Tax on an annual basis or how is it charged
(3)Do I need to register for VAT and if so who do I speak to or contact
(4)Am I entitled to any form of tax Credits or similar Tax Free allowances.
(5)Do I need business bank accounts and if so what do I need to get them set up.
(6)If I operate from my home initially will this create any problem for tax purposes.
(7)Am I entitled to off set the initial set up expense against tax, such as Computers, Office furniture ect..

Sorry for asking so much but its my first time to really consider this option as a serious consideration as I know there are a few job cuts coming where I am working at the moment and I want to make sure that if I go before they come that I have as much sorted out.

Thanking you in advance for you help .
Paul.

bullpost

I was a Sole Trader but that over five years ago.

(1)Do I need an accountant. - Strictly No but probably realistically yes!
(2)Do I pay Corporation Tax on an annual basis or how is it charged - Its charged in Advance which is a bummer!
(3)Do I need to register for VAT and if so who do I speak to or contact - Yes if you go over the limits, which you will if you want to make a living!
(4)Am I entitled to any form of tax Credits or similar Tax Free allowances. - not sure!
(5)Do I need business bank accounts and if so what do I need to get them set up. - Again don't think its strictly needed but its better to keep it separately.
(6)If I operate from my home initially will this create any problem for tax purposes - No.
(7)Am I entitled to off set the initial set up expense against tax, such as Computers, Office furniture ect.. - Yes. Any legitimate expenses can be offset. This can include furniture etc. if you work from home.

tyler_d

I'd be careful about setting off bills though. Im working from too and i asked my accountant about this issue and told me that i should not reclaim vat on utility bills for my home address as this complicates things for principal private residence relief for CGT"

pwd

I wouldn't get an accountant unless your accounts turn out to be overly complex or you are raking it in.

Diceicle

FAS do a start your own business course. It costs €200 and it covers all the areas you ask about. Every Tues was my one, 10 weeks 6 - 9 (i think). Well worth lookin into.

drdre

Diceicle wrote:

FAS do a start your own business course. It costs €200 and it covers all the areas you ask about. Every Tues was my one, 10 weeks 6 - 9 (i think). Well worth lookin into.

Is it 200 for the whole course and whats the course called.I would be interested

Diceicle

Yeah 200 in total. I did mine in the Jervis street branch. Just give them a call and they'll let you know when the next ones runnin and if there's one nearer you. They just call it "starting your own business". Could have thought of something snappier to call it imo.
Its a basic but comprehensive course and you get a free book thats really helpful in putting together your business plan for el bank manager.

MartMax

paulmbyrne1976

1. First, if you had hire a decent accountant, he would be able to answer all those questions.
   
2. Secondly, sole-traders are not liable for corporation tax but income tax. i presume when you say you going "sole-trader", you are not incorporating a company or other similar legal form of entities.
   
3. As for the VAT, if you meet certain criteria - you must register for VAT. the criteria includes turnover limit. otherwise, you may also opt to register for VAT in order to claim VAT on purchases you made.
   
4. Like any other individuals, sole-traders are entitled to personal allowance, marriage tax credits and others, include PAYE as long as you are an PAYE employee.
   
5. Irish laws require businesses to keep proper books and records, at least for the last six years. therefore separating personal and business bank accounts is always a best practice. setting up a business account would normally requires you to present a copy of business name registration certificate.
   
6. There should not be any issues running your business from home. Unless for example, you are renting and your agreement with landlord has clearly stated that there should not be any business activities held in the place.
   
7. Any legitimate expenses for business maybe included in your accounts. As for utilities like electricity, broadband, etc there is no standard measure but if you could reasonably justify the use for business it is acceptable. If you have computer, fax machines, desk, etc specifically held for business use, you can capitalise the items in the accounts and may claim capital allowance for tax purpose.

Hope the above helps - good luck.

Marty

munster30

Just a quick note, you need to decide whether you want your business to be incorporated, and therefore with limited liability or if you wish to trade as a sole trader. Whicever route you take may have reprusussions later on ,should you wish to extract money from the company in the most tax efficient way.