Self employed question

reilig

I have a young relation (18 yrs). he is going to be at home for the next 12 months running the family farm for which he will receive no pay. He is going to have a few spare hours and he has asked both myself and my brother in law if we would have anything for him. Between us, we might have 10 hours a week. Neither of us are wizards at accounting, and he has asked us for advice.

Can he set himself up as self employed and do his own returns on any money he will earn from us?

He will probably earn no more than €100 per week. What is the likely tax/PRSI/USc charges he faces on that amount considering that he has no other income and is not entitled to any state benefits?

How difficult would it be for him to make a return on these earnings himself without employing the services of an accountant? Would it be simply a case of recording his income on a weekly basis and at the end of the year and then making a return through ROS?
Would an ordinary person be able to do this? (with my help if needed) he will have no expenses. For such a small amount, it may not be affordable to pay an accountant.

He has a full medical card - is he exempt from the USC?

He may be able to get a few hours work from a few other farmers over the summer as well, so he thinks that setting himself up as self employed would be the easiest way to go.

Anyone got any opinions?

lakill Farm

Reilig,

Best thing for him to do is set up as self employed, and invoice to his clients every week or month. (Thats the sales sorted)

Then get receipts for all his expenses, (expenses)

Put them onto excel and he has a P&L.

I say its best at this stage to get someone to do his tax. Might cost €100 plus vat . they will then deregister him for tax if he is full finished up

reilig

Thanks for that.

I'll pass on the quote and see what he thinks.

He really won't have any expenses.

We'll talk about it further and see what he thinks.

Cheers

lakill Farm wrote: »

Reilig,

Best thing for him to do is set up as self employed, and invoice to his clients every week or month. (Thats the sales sorted)

Then get receipts for all his expenses, (expenses)

Put them onto excel and he has a P&L.

I say its best at this stage to get someone to do his tax. Might cost €100 plus vat . they will then deregister him for tax if he is full finished up

Tipp Man

reilig wrote: »

Thanks for that.

I'll pass on the quote and see what he thinks.

He really won't have any expenses.

We'll talk about it further and see what he thinks.

Cheers

Relig

He should want as much expenses as possible;)

nilhg

This might help too.


http://www.welfare.ie/EN/Publications/Documents/codeofpract.pdf

mattthetrasher

what about if he joins frs, all paperwork sorted and he would have a ref if applying for a job elsewhere.he has his tax insurance and maybe extra work too.you have tax relief and your insurance is covered .good deal allround.they do employee courses too so he would get skills too.

reilig

mattthetrasher wrote: »

what about if he joins frs, all paperwork sorted and he would have a ref if applying for a job elsewhere.he has his tax insurance and maybe extra work too.you have tax relief and your insurance is covered .good deal allround.they do employee courses too so he would get skills too.

FRS charge 50% commission. ie FRS charge me Eur15 per hour and he gets paid Eur10. I want to cut out the middle man and let the young lad get the bulk of the money if I can. I have insurance to cover him. He has a green cert.

1chippy

I wouldn t advise him to go self employed. he will have too many q's if he is unfortunate enough tohave to sign on. there is an exemption on the amount of money he is allowed earn each year. could you not just put him down as part time. I worked this way for a few farmers years back. each one paid cheque. i claimed tax back when i went to college. maybe an accountant on here could advise you better.

Farmer Pudsey

Both of you register him as an employee he will have the personal and paye allowance you will have to only pay about 50ish usc for him ( for 8000 a year you pay about 170) It will make no difference what way it is done if he can make his tax returns himself he will only have to pay a small USC contribution

reilig

Farmer Pudsey wrote: »

Both of you register him as an employee he will have the personal and paye allowance you will have to only pay about 50ish usc for him ( for 8000 a year you pay about 170) It will make no difference what way it is done if he can make his tax returns himself he will only have to pay a small USC contribution

Does the fact that he has a medical card not mean that he has no USC to pay???

Farmer Pudsey

Does the fact that he has a medical card not mean that he has no USC to pay???

Not sure if you can have a chat with your/an accountant he will let know very fast

KCTK

reilig wrote: »

Does the fact that he has a medical card not mean that he has no USC to pay???

Hi Reilig, once earning under €10,036 in 2012 no USC, the limit was raised in the December budget, USC explained in all its glory at this link http://www.revenue.ie/en/tax/usc/index.html

Muckit

As far as I know pocket money is tax exempt

reilig

Muckit wrote: »

As far as I know pocket money is tax exempt

:D:D

The young lad has his reasons for wanting to do things by the book and show a return on it, even if he has no tax to pay. I'll help him if it isn't too much out of my way

milkprofit

How much did insurance cost

reilig

milkprofit wrote: »

How much did insurance cost

Its employers liablilty on the farm policy so I can't really give you a breakdown of it.

milkprofit

you would a break down to now how much wages you are covered for