Developing a growing website - tax implications?

Francie Barrett

Put this topic here because I want to talk to developers who have had the same problem as me....

I am currently working on a website that has been growing (both in terms of features/functionality and users) for awhile. It's not commercial in the strictest sense that I am not selling any products or services (not yet at least), but it does generate a small amount of income through Google Adsense and Paypal donations (last year it generated about €600). Even before things like domain and hosting costs, the amount of hours I have put into it so far equate to me getting about 50 cent for every hour I have put into the site. I am not too bothered by this, the site I am working on is still more of a hobby than a way of making money.

The good news, is that next year, I think the site could generate €1k-€2k. I have some ideas around commercialization that might double this (they might work, they might not). Up until now, I haven't bothered with tax (I seriously doubt the tax man will come calling to me for a three-figure sum). However, since my revenue is now hitting a 4 digit figure, I think I need to start looking at this.

What are my options? Obviously, since it's not like I am rolling with money, I want to get myself legit in the cheapest possible way. Do I need to register myself as a sole trader, or set up a company? If so, what are the costs involved here? Will I need to file separate accounts? If I use an accountant, any profits I generate will be wiped out. Is it possible that I can file my own returns, given my incoming and outgoings are relatively simple?

Any thoughts or suggestions would be welcome!

bigbadcon

I am in the same boat, i have a couple of websites that were only generating pennies over the last couple of years but have now started to earn a bit more.

I reckon Ill make about 1500 this year from them.

I dont think you need to set up as a sole trader as that is probably overkill for the amount you will be earning on the site but I think you are "supposed" to somehow declare these earning which will then be taxed at whatever tax rate you are on.

techguy

You don't need to set up a company or register a business name in the CRO. You only need a business name if you wish to trade under a name other than your own.

What you will need to register with the Revenue using for TR1 for tax registration. Then you will need to file a FORM12 form to declare your earnings for each year.

I have done this and you will be able to do it by yourself, no need for an accountant.

During the year you need to keep track of expenses and income. You will be able to put down your hosting costs, domain regs and internet bill as expenses that can be used to reduce your tax bill if you are liable for payment.

I think this is all categorised as being self employed so you need to pay employers PRSI also. I just had to pay the minimum which is ~€250. If you have any questions just call/email the revenue. They're really helpful.

kincsem

I was an accountant (now retired.) I would go into your tax office (phone them and tell them your PSI number) with the bits of paper showing your extra income. Afaik they should work out your tax position for you. You don't need an accountant. The dumber you act the sooner they will want to sort it and get you out the door (if you are a lady crying a bit helps.)
hth

Clanket

techguy wrote: »

I think this is all categorised as being self employed so you need to pay employers PRSI also. I just had to pay the minimum which is ~€250. If you have any questions just call/email the revenue. They're really helpful.

You only pay Employer's PRSI when you hire employees. That was employee PRSI you paid.

Assuming you go the sole trader route:-

• You'll be liable to the USC (Universal Social Charge) and employee PRSI on any profits you make (Income less allowable business costs).

• You'll be liable to Income tax (the rate depends on whether you have other earnings etc).

If you want some advice or help, PM me.