Accounts for Sole Trader

Speculator

Hello,

I am PAYE and have just set up a sole trader business on the side.

What can I and cant I include in my accounts as expenses.

• Advertising expenses.
• Internet marketing.
• Meals out
• Mobile phone bills although not all calls would be for my sole trader business.
• If I was planning on purchasing a car could I put this down as an expense as I will need it for the sole trader business (Remember I am also PAYE)

Is there a general sole trader accounts template available on the internet?

All advice appreciated.

Regards
Paul

Gloomtastic!

Advertising expenses - yes

Internet marketing - yes

Meals out - no

Mobile phone bills although not all calls would be for my sole trader business - yes. If you have a package deal you can claim the full amount as a business expense.

If I was planning on purchasing a car could I put this down as an expense as I will need it for the sole trader business (Remember I am also PAYE) - You can claim up to €23,000 against a car purchase and up to 85% of motor expenses if you also use it as a private vehicle.

All expenses that you incur in the running of your business are allowable. Except a portion of your rent/mortgage if you work from home - that is not allowed. You can however claim a portion of your heat/electric. Don't forget your Internet provision.

I have an accounts template you're looking for. PM me your email address and I'll send it to you.

srsly78

Gloomtastic! wrote: »

Meals out - no

Corporate entertainment - yes. This is no problem for a limited company, and I don't see why a sole trader would be treated differently.

Note names of all attending should be recorded.

A limited company can also expense a portion of rent for home office. I do not see why a sole trader would be treated differently, this is a legitimate business expense. Mortgage no, rent yes.

OP it is worth paying an accountant for proper advice. Much better than asking randomers on the internet. Expenses are hugely important for an self-employed person.

smeharg

srsly78 wrote: »

Corporate entertainment - yes. This is no problem for a limited company, and I don't see why a sole trader would be treated differently.

...

Client entertainment is not allowable - for limited companies or sole-traders.

phormium

Was just reading this question as am also interested in answer, I know the advice is always given to talk to an accountant. Sometimes though it can be better to get many answers to see if they all agree. I have spoken to 3 different accountants about similar, accounts for a very basic sole trader business, got different information from all 3, in the end I decided to ring Revenue and ask them some questions to try and get the definitive answer. Interestingly Revenue said 2 of the accountants while giving differing answers to the same question were both kind of right, Revenue said Accountant 1 gave me the correct rule but Accountant 2 gave me what was actually done in practice.

Gloomtastic - any chance I could get a copy of that template too, please?

Gloomtastic!

phormium wrote: »

Gloomtastic - any chance I could get a copy of that template too, please?

If you haven't already done so, please PM your email address.

srsly78

smeharg wrote: »

Client entertainment is not allowable - for limited companies or sole-traders.

Entertainment for employees = allowed. Christmas party = allowed. Beers on friday = allowed.

Also see here: http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-05/05-03-02.pdf?download=true

"Payments which are no more than the reimbursement of vouched expenses actually incurred wholly, exclusively and necessarily in the performance of the director's or employee's duties are not normally treated as emoluments (Paragraph 4.4 of Employer's Guide to PAYE). The same treatment should be applied to payments in respect of the reimbursement of vouched entertainment expenses."

smeharg

srsly78 wrote: »

Entertainment for employees = allowed. Christmas party = allowed. Beers on friday = allowed.

Also see here: http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-05/05-03-02.pdf?download=true

"Payments which are no more than the reimbursement of vouched expenses actually incurred wholly, exclusively and necessarily in the performance of the director's or employee's duties are not normally treated as emoluments (Paragraph 4.4 of Employer's Guide to PAYE). The same treatment should be applied to payments in respect of the reimbursement of vouched entertainment expenses."

Not sure what point you're trying to make but client entertainment is never allowed and sole-traders aren't employees.

Glenbhoy

srsly78 wrote: »

Corporate entertainment - yes. This is no problem for a limited company, and I don't see why a sole trader would be treated differently.

Note names of all attending should be recorded.

A limited company can also expense a portion of rent for home office. I do not see why a sole trader would be treated differently, this is a legitimate business expense. Mortgage no, rent yes.

OP it is worth paying an accountant for proper advice. Much better than asking randomers on the internet. Expenses are hugely important for an self-employed person.

If you own your own property you will be liable to CGT on the office part of the property if you sell it at a profit (apparently it used to happen).

rainbowdash

smeharg wrote: »

Not sure what point you're trying to make but client entertainment is never allowed and sole-traders aren't employees.

But of course if you gave the local rugby club €3000 to place an advertisement on their notice board and an envelope pops through your letterbox with an advertising receipt along with 10 international match tickets with admission to the pre match function then that would just be a coincidence!

thecelt

Gloomtastic - any chance I could also get a copy of that template too, thanks?

Gloomtastic!

thecelt wrote: »

Gloomtastic - any chance I could also get a copy of that template too, thanks?

Please PM me your email address.....

aidan.connolly

Hi, If you purchase a car for the business, you have to capitalise it and then you can calim deprecation over 8 years ( 12.5% per year ) .
I dont think you can claim it all in the first year.

I would suggest, as others have suggested, have a chat with an accountant and remove any doubt.

You should be also aware that for the purposes of your taxes, both your PAYE and "sole trader" income are combined to reach your taxabe earnings. If you are currenlty using all your Allowances for your PAYE income, you should expect a high tax hit on your profits of your Sole Trader business.

Best advice. See an Accountant.

Aidan

Howtodo

Gloomtastic! wrote: »

Advertising expenses - yes

Internet marketing - yes

Meals out - no

Mobile phone bills although not all calls would be for my sole trader business - yes. If you have a package deal you can claim the full amount as a business expense.

If I was planning on purchasing a car could I put this down as an expense as I will need it for the sole trader business (Remember I am also PAYE) - You can claim up to €23,000 against a car purchase and up to 85% of motor expenses if you also use it as a private vehicle.

All expenses that you incur in the running of your business are allowable. Except a portion of your rent/mortgage if you work from home - that is not allowed. You can however claim a portion of your heat/electric. Don't forget your Internet provision.

I have an accounts template you're looking for. PM me your email address and I'll send it to you.

Hi
Like the other person I am PAYE and a sole trader, I downloaded a software package for €14.99 but am not sure where I enter business expenses, do they come under purchases? My business is very simple, just a service with no actual purchases just expenses. I would appreciate it ifyou could also send me that software template please?
So you cant claim a portion of mortgage interest if you work from home?
Thanks

papamac

Hi Gloomtastic,

Would you mind giving me a copy of that accounts template.

Thanking you

papamac

Gloomtastic!

papamac wrote: »

Hi Gloomtastic,

Would you mind giving me a copy of that accounts template.

Thanking you

papamac

I need your email address papamac. Please pm me.

Gloomtastic!

Mrs Accounts wrote: »

Hey

For any of you guys in the Southeast i can recommend an good accountant who does accounts for 500 to 600e and Vat returns for 50e.

Pm if you like their contact details

When you say accounts for €500 to €600, do you mean tax returns? I used to be charged this by my accountant before I discovered I could file them myself online for nothing!

barneystinson

Gloomtastic! wrote: »

Mrs Accounts wrote: »

Hey

For any of you guys in the Southeast i can recommend an good accountant who does accounts for 500 to 600e and Vat returns for 50e.

Pm if you like their contact details

When you say accounts for €500 to €600, do you mean tax returns? I used to be charged this by my accountant before I discovered I could file them myself online for nothing!

I presume she means accounts and tax returns. You must do your own accounts as well as your tax return so?

I'm not being smart but unless you're either much more clued in than the average sole trader you've probably made mistakes that could cost you more money in the long run than you're saving yourself by doing a DIY job.

Also, how do you get approval for finance/overdraft from your bank; they tend to be pretty sticky about stuff like accounts certified by the accountant etc...?

Do you adjust the trade profit for disallowable expenses? Do you add back depreciation and claim capital allowances? Do you retain a schedule of the tax written down value of your fixed assets, and calculate balancing allowances or charges on disposals of vehicles/equipment? Do you properly accrue for prepayments and accruals, trade debtors and trade creditors, do you fully reconcile your bank account? Do you properly account for leases/Hire purchases, and do the necessary adjustments to the adjusted profit computation when a rebate of rentals occurs (and ditto on your vat return)? If you do all that, then fair play to ya, and particularly if you can do it in an amount of time shorter than it would take you to earn 500 quid to pay an accountant.

A good accountant always adds value and pays for themselves in the long run. And if you are good at what you do, your time is generally better spent earning money doing that than slaving through your accounts and tax return. Just like you wouldn't try to plumb your own house just because plumbers are a bit expensive...

Gloomtastic!

barneystinson wrote: »

Gloomtastic! wrote: »

Mrs Accounts wrote: »

Hey

For any of you guys in the Southeast i can recommend an good accountant who does accounts for 500 to 600e and Vat returns for 50e.

Pm if you like their contact details

When you say accounts for €500 to €600, do you mean tax returns? I used to be charged this by my accountant before I discovered I could file them myself online for nothing!

I presume she means accounts and tax returns. You must do your own accounts as well as your tax return so?

I'm not being smart but unless you're either much more clued in than the average sole trader you've probably made mistakes that could cost you more money in the long run than you're saving yourself by doing a DIY job.

Also, how do you get approval for finance/overdraft from your bank; they tend to be pretty sticky about stuff like accounts certified by the accountant etc...?

Do you adjust the trade profit for disallowable expenses? Do you add back depreciation and claim capital allowances? Do you retain a schedule of the tax written down value of your fixed assets, and calculate balancing allowances or charges on disposals of vehicles/equipment? Do you properly accrue for prepayments and accruals, trade debtors and trade creditors, do you fully reconcile your bank account? Do you properly account for leases/Hire purchases, and do the necessary adjustments to the adjusted profit computation when a rebate of rentals occurs (and ditto on your vat return)? If you do all that, then fair play to ya, and particularly if you can do it in an amount of time shorter than it would take you to earn 500 quid to pay an accountant.

A good accountant always adds value and pays for themselves in the long run. And if you are good at what you do, your time is generally better spent earning money doing that than slaving through your accounts and tax return. Just like you wouldn't try to plumb your own house just because plumbers are a bit expensive...

Funny, none of my accountants ever mentioned any of those services. They just filed my tax return to the revenue (I had to fill in their template) and charged me €500 for the pleasure.

Everything else I do myself. It's not rocket science and all you need is a bit of knowledge in the workings of a Spreadsheet.

barneystinson

Gloomtastic! wrote: »

Funny, none of my accountants ever mentioned any of those services. They just filed my tax return to the revenue (I had to fill in their template) and charged me €500 for the pleasure.

Are you VAT registered? And you're telling me you didn't receive from any of these people a set of accounts i.e. an accountant's report, a P&L and a balance sheet? In order to generate a proper set of accounts some/all of those "services", that you say were never mentioned to you, have to happen.

It's like walking into a chipper and ordering a bag of chips - they don't tell you "we're going to chop up some potato then put it into hot oil and cook it for a few minutes..."; in the same way an accountant shouldn't need to explain to you the exact steps they need to follow to produce your accounts, but there should/will be a number of steps.

And you never answered my question about the banks, I'd be very interested to hear if/how you get facilities from a bank without accountant certified accounts...

You may also have missed a key phrase in my post - "good accountant" - like most trades / professions there are plenty of bad ones, who'll overcharge you and not provide a service. But my point remains, a good accountant will always pay for themselves, particularly if your ambition is to grow or expand your business into a bigger operation, or when you get a Revenue audit.

Gloomtastic! wrote: »

Everything else I do myself. It's not rocket science and all you need is a bit of knowledge in the workings of a Spreadsheet.

So, by this do you mean that you don't do any of the things I listed in my previous post, because if you don't then you've just implied that you clearly do need an accountant...

Gloomtastic!

barneystinson wrote: »

Gloomtastic! wrote: »

Funny, none of my accountants ever mentioned any of those services. They just filed my tax return to the revenue (I had to fill in their template) and charged me €500 for the pleasure.

Are you VAT registered? And you're telling me you didn't receive from any of these people a set of accounts i.e. an accountant's report, a P&L and a balance sheet? In order to generate a proper set of accounts some/all of those "services", that you say were never mentioned to you, have to happen.

Not VAT registered anymore but when I was, I used to file my own returns. As for P&L/balance sheets/accounts etc, I produce my own. I have been in business for eighteen-odd years and know my way around an accounts department. It should also be noted that I started my business career in the UK where processes are everything.

I have supplied an Excel template to a couple of dozen sole traders here on Boards and elsewhere. It comprises a P&L balance worksheet, an income worksheet, an out goings worksheet and an invoice template. Everything a sole trader needs as far as accounts are concerned. Have had no negative feedback from anyone yet. As I said, it's not rocket science, it's just about following procedures.

As for a bank loan, I follow my late father's no. 1 rule after 65 years in business - never a lender or a borrower be. If you don't have the cash, don't spend it. Something this country would do well to follow.

barneystinson

Gloomtastic! wrote: »

barneystinson wrote: »

Gloomtastic! wrote: »

Funny, none of my accountants ever mentioned any of those services. They just filed my tax return to the revenue (I had to fill in their template) and charged me €500 for the pleasure.

Are you VAT registered? And you're telling me you didn't receive from any of these people a set of accounts i.e. an accountant's report, a P&L and a balance sheet? In order to generate a proper set of accounts some/all of those "services", that you say were never mentioned to you, have to happen.

Not VAT registered anymore but when I was, I used to file my own returns. As for P&L/balance sheets/accounts etc, I produce my own. I have been in business for eighteen-odd years and know my way around an accounts department. It should also be noted that I started my business career in the UK where processes are everything.

I have supplied an Excel template to a couple of dozen sole traders here on Boards and elsewhere. It comprises a P&L balance worksheet, an income worksheet, an out goings worksheet and an invoice template. Everything a sole trader needs as far as accounts are concerned. Have had no negative feedback from anyone yet. As I said, it's not rocket science, it's just about following procedures.

As for a bank loan, I follow my late father's no. 1 rule after 65 years in business - never a lender or a borrower be. If you don't have the cash, don't spend it. Something this country would do well to follow.

Ah that explains a bit then, and if you're operating at a level below VAT threshhold (which is really a micro-business) then it may be simple enough. However, as I said if you wanted to expand your business and required bank finance I think you might get a nasty surprise.

If you're supplying this template to other people I hope it's all right; could be case of the blind leading the blind otherwise...

Actually, based on your description of it, it doesn't appear to involve double entry bookkeeping, nor does it produce a balance sheet. Do you prepare a debtors control account or creditors control account? Or opening/closing stock calculations? And have you ever had a revenue audit, and if so were they satisfied with your records?

Gloomtastic!

barneystinson wrote: »

Ah that explains a bit then, and if you're operating at a level below VAT threshhold (which is really a micro-business) then it may be simple enough. However, as I said if you wanted to expand your business and required bank finance I think you might get a nasty surprise.

If you're supplying this template to other people I hope it's all right; could be case of the blind leading the blind otherwise...

Actually, based on your description of it, it doesn't appear to involve double entry bookkeeping, nor does it produce a balance sheet. Do you prepare a debtors control account or creditors control account? Or opening/closing stock calculations? And have you ever had a revenue audit, and if so were they satisfied with your records?

You must be a whizz at dinner parties Barney!

I run a business that sells a service to consumers and businesses that include some of the largest corporations in the world. I don't need double entry whatsits, I get paid on the day or else I'm sticking to you like glue until I do get paid, any creditors are paid on invoice.

My business, and my accounts template, have been used as a case study by Smurfit Business School and they found no blind spots.

If revenue wanted an audit in the morning they'd find my accounts as tight as a knat's ass.

If I needed money to expand, I don't believe my bank would have any issues with my accounts either. Who were Anglo Irish Bank's auditors again?

Business is simple - give the customer what they want plus some, get your money in on time and keep your suppliers happy. I do all of the above very well. It might be a micro business, as you call it, but it suits me and my family 100%. I also know I could transfer my knowledge to any other business and make it work just as well.

Bloody Professionals, I've never been disappointed with how useless they really are!

barneystinson

Gloomtastic! wrote: »

barneystinson wrote: »

Ah that explains a bit then, and if you're operating at a level below VAT threshhold (which is really a micro-business) then it may be simple enough. However, as I said if you wanted to expand your business and required bank finance I think you might get a nasty surprise.

If you're supplying this template to other people I hope it's all right; could be case of the blind leading the blind otherwise...

Actually, based on your description of it, it doesn't appear to involve double entry bookkeeping, nor does it produce a balance sheet. Do you prepare a debtors control account or creditors control account? Or opening/closing stock calculations? And have you ever had a revenue audit, and if so were they satisfied with your records?

You must be a whizz at dinner parties Barney!

I run a business that sells a service to consumers and businesses that include some of the largest corporations in the world. I don't need double entry whatsits, I get paid on the day or else I'm sticking to you like glue until I do get paid, any creditors are paid on invoice.

My business, and my accounts template, have been used as a case study by Smurfit Business School and they found no blind spots.

If revenue wanted an audit in the morning they'd find my accounts as tight as a knat's ass.

If I needed money to expand, I don't believe my bank would have any issues with my accounts either. Who were Anglo Irish Bank's auditors again?

Business is simple - give the customer what they want plus some, get your money in on time and keep your suppliers happy. I do all of the above very well. It might be a micro business, as you call it, but it suits me and my family 100%. I also know I could transfer my knowledge to any other business and make it work just as well.

Bloody Professionals, I've never been disappointed with how useless they really are!

Kudos to you, but the above post illustrates how you are the exception rather than the rule, so my concerns about the suitability of your approach for other traders remain.

If you aren't VAT registered you can't be selling much of this service.

And do dinner parties still happen?!

Attabear

Gloomtastic! wrote: »

I don't need double entry whatsits,

And with that, the entire accounting profession was dismissed.:)

Gloomtastic!

Attabear wrote: »

Gloomtastic! wrote: »

I don't need double entry whatsits,

And with that, the entire accounting profession was dismissed.:)

Amen to that!

gccrowley1

Gloomtastic! wrote: »

Advertising expenses - yes

Internet marketing - yes

Meals out - no

Mobile phone bills although not all calls would be for my sole trader business - yes. If you have a package deal you can claim the full amount as a business expense.

If I was planning on purchasing a car could I put this down as an expense as I will need it for the sole trader business (Remember I am also PAYE) - You can claim up to €23,000 against a car purchase and up to 85% of motor expenses if you also use it as a private vehicle.

All expenses that you incur in the running of your business are allowable. Except a portion of your rent/mortgage if you work from home - that is not allowed. You can however claim a portion of your heat/electric. Don't forget your Internet provision.

I have an accounts template you're looking for. PM me your email address and I'll send it to you.

Just wondering could you also pm me the template.......

Cheers

07734

Would love the template too, thanks
07734

ebbsy

Go get a proper accountant. Oh and if ye had a revenue audit in the morning you would need one.

gccrowley1

ebbsy wrote: »

Go get a proper accountant. Oh and if ye had a revenue audit in the morning you would need one.

Probably will but I have literally just setup and cash is hard enough to come by without paying for an accountant , I just want rough idea of what to keep a track of and if I have a spreadsheet with this template filled with all details then would it not be a bit easier for me and the accountant to organise...I just like to be able to see easily any income and outgoings and expenses at home but don't know how to layout......

borderlinemeath

Hi Gloomtastic, just sent you a pm for a copy of your template, thanks a mil.