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New soletrader - tax query

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  • 23-04-2012 2:20pm
    #1
    LJL
    Registered Users Posts: 83 ✭✭


    Hi,

    Im a new soletrader and wondering roughly how much money to set aside for tax returns. As I get paid I would like to put aside a chunk of the invoice. Would 30% of the invoice be enough to put away?


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    #2
    mkdon05
    Registered Users Posts: 766 ✭✭✭mkdon05


    It depends on what sort of profit you think you will make. If it is below 32000 is say to put aside 33% if you will have profit above that amount I would say approx 38%. These are just guesstimates without knowing some projected figures.


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    #3
    LJL
    Registered Users Posts: 83 ✭✭LJL


    thanks mkdon05. you dont happen to know if you have two businesses if you need to register with revenue twice?


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    #4
    billybunty
    Registered Users Posts: 127 ✭✭billybunty


    LJL wrote: »
    thanks mkdon05. you dont happen to know if you have two businesses if you need to register with revenue twice?
    Ljl,
    If you are a sole trader you wont need to register twice. You will be consolidating all "accounts" under the one umbrella/person, being yourself.
    You most likely keep seperate accounts records for each business so you'll add them all up as income/expenditure etc at the end of the year!
    Hope this helps.


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    #5
    smeharg
    Registered Users Posts: 300 ✭✭smeharg


    billybunty wrote: »
    LJL wrote: »
    thanks mkdon05. you dont happen to know if you have two businesses if you need to register with revenue twice?
    Ljl,
    If you are a sole trader you wont need to register twice. You will be consolidating all "accounts" under the one umbrella/person, being yourself.
    You most likely keep seperate accounts records for each business so you'll add them all up as income/expenditure etc at the end of the year!
    Hope this helps.

    Just to be clear: records for each trade should be kept separately. There is provision on Form 11 to enter details of each trade separately. It would be incorrect to add all the income together and subtract all the expenditure.

    Obviously you're taxed on the combined profits.


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    #6
    JCYSHOW
    Registered Users Posts: 18 ✭JCYSHOW


    LJL wrote: »
    thanks mkdon05. you dont happen to know if you have two businesses if you need to register with revenue twice?

    No, as a sole trader once you register you receive one tax registration number. All trades you carry on are then under this one registration number.
    If the trades are definately separate and not just a different version/revenue stream of the one trade then you must keep separate records and return the details separately on the form 11.

    Also note as a sole trader once you register for VAT you are registered for VAT for all your trades. You cannot just register one trade for VAT. if you need to register one and really dont want to register the other then you will need to look at setting up a company or partnership for one of the trades to separate the VAT registration.

    In relation to how much to set asside for tax on each invoice it really is hard to tell without more details. You will only pay tax on the profit, so it will be different for all businesses. If your invoices are nearly 100% profit ie you have little or no costs (lucky you) then you might have to provide for 30 to 40% as tax on that. However if say you invoice €1,000 but you have €900 costs then you will only be paying tax on the €100 profit so 30 to 40% of €100 not the €1,000 would be plenty to earmark for tax in this case.
    The above is all VERY general and will vary wildly depending on your circumstances, level of profits, tax credits available, whether you have other income etc etc

    One thing to note though is that if you are registered for VAT you must set asside the VAT portion of the invoice for payment to revenue regardless whether you made a profit or not in the period.

    I've sent you a PM with further details.

    JCYSHOW


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    #7
    playhouse12
    Registered Users Posts: 10 ✭playhouse12


    Hi JCYSHOW,just a fast question,if you dont mind,i know a ltd company in UK,and we have already priced work here in IRl under the UK company name,and will know in a few weeks if our bids are successful,what is the best way to operate both here in ireland and uk,would it be best for me to also have a ltd company here under the same brand name as uk company only IRE LTD,or easier with partnership
    Kind Regards
    Playhouse


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    #8
    billybunty
    Registered Users Posts: 127 ✭✭billybunty


    smeharg wrote: »
    billybunty wrote: »
    LJL wrote: »
    thanks mkdon05. you dont happen to know if you have two businesses if you need to register with revenue twice?
    Ljl,
    If you are a sole trader you wont need to register twice. You will be consolidating all "accounts" under the one umbrella/person, being yourself.
    You most likely keep seperate accounts records for each business so you'll add them all up as income/expenditure etc at the end of the year!
    Hope this helps.

    Just to be clear: records for each trade should be kept separately. There is provision on Form 11 to enter details of each trade separately. It would be incorrect to add all the income together and subtract all the expenditure.

    Obviously you're taxed on the combined profits.

    Thanks for that, i kinda meant that but i get that i didnt state it! Your right of course


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    #9
    LJL
    Registered Users Posts: 83 ✭✭LJL


    thanks everyone.


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    #10
    JCYSHOW
    Registered Users Posts: 18 ✭JCYSHOW


    playhouse12 wrote: »
    Hi JCYSHOW,just a fast question,if you dont mind,i know a ltd company in UK,and we have already priced work here in IRl under the UK company name,and will know in a few weeks if our bids are successful,what is the best way to operate both here in ireland and uk,would it be best for me to also have a ltd company here under the same brand name as uk company only IRE LTD,or easier with partnership
    Kind Regards
    Playhouse

    Hi Playhouse

    This can get very complicated! There are specific rules in relation to working in a foreign contry, in this case Ire. The issues surround whether you are established in the country and therefore might be liabile to Corporation tax on the profits here and issues relating to the operation of PAYE on the income your employees earn while working here.
    Basically depending on the type of work and the length of time they will be workng here the company might have to register and pay income tax (operate the PAYE system) on the employees earnings even if it comes from the UK company.

    To even have an idea if any of this applies in your situation I would need to know more details of the type and scale of work and how long the employees would be here. Would you set up an office etc.
    If you aren't comfortable posting this on the forum PM me with some details.


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