Do I have to pay VAT on income 1,200 per year?

Green Mile

I am a PAYE worker.

Outside of work, I want to do extra work on the weekend and charge a new client I have. I explained I will charge 100 for the service but that he must pay me 123 including VAT to which he said 'no problem' as he'll claim back to VAT from Revenue.

I don't have a VAT number yet and I have been looking at registering with CRO and Revenue (which leaves me with a big pile of other questions).

My main question now is, I'll be charging 100euro excluding VAT for 12 months. Does this leave me under a threshold so I don't have to pay VAT over to Revenue and therefor I should only be charging my client 100 in total?

Does it look dodgy if I don't have a VAT number on my invoice?

(i've so many questions but perhaps this is all easier than I think it is (I hope))

srsly78

If you are under the threshold registration for vat is optional. You might choose to register so you can claim vat back on your input costs.

If you are not registered for vat you cannot charge vat.

Peterdalkey

You don't need to register for Vat or thus charge it. You will need to return the income each year on you tax terturn under " other income" section!

Green Mile

Peterdalkey wrote: »

You don't need to register for Vat or thus charge it. You will need to return the income each year on you tax terturn under " other income" section!

What tax return form? I'm a PAYE worker so I've never done such a form.

So when my client asked why there's no VAT on my invoice, I'll need to explain to him that the company (yet to be registered) earns too little to make a charge?

Peterdalkey

You will now! and every PAYE worker is obliged to fill one out if Requested by Revenue.

Simple answer to client, you just say you are not VAT registered, end of!

Green Mile

Thanks for the reply.

But my 'new company' will earn this money, not me. So I wouldn't have to declare it under 'other income' as it's not an income to me but rather a separate entity.

I'm just wonder how revenue gets involved if theres no registration?

Peterdalkey

You are a sole trader unless you have a ltd company and it is you who is liable for the tax!

Revenue will not view this as regular business but more like a teacher giving grinds on the side !

Green Mile

Ok this is interesting and thanks for all this info.

I can be a sole trader and a PAYE worker at the sametime?

Revenue would consider my combined income then and charge me a rate relative to my tax cert?

Peterdalkey

Yep, yep and good luck!

relax carry on

Green Mile wrote: »

Ok this is interesting and thanks for all this info.

I can be a sole trader and a PAYE worker at the sametime?

Revenue would consider my combined income then and charge me a rate relative to my tax cert?

Oh dear. You may want to do a bit of reading about the tax implications of your non PAYE income. It will save you some expensive surprises in the ling run.

http://www.revenue.ie/en/business/self-assessment.html

Green Mile

Guy, is there a Revenue leaflet or something in writing that states I should apply VAT to the €100 invoice?
I think this will be queried and I'd like to have supporting documents.

I am exempt from charging vat because the income less than a tyearly hreshold right?

srsly78

If you are not registered for vat then you do not charge it, simple as that.

Whether you need to be registered or not depends on your total sales -> http://www.revenue.ie/en/tax/vat/registration/thresholds.html

Green Mile

Thanks for that, sorry for all the silly questions but I just have one more query.

If my PAYE income from my full time job is 35,000, and now this side project pushes my income over the 35,000 threshold, am I deemed to now register for a vat number?

srsly78

Your other personal activities are not counted towards the vat threshold. Only the sales of your business count.

Green Mile

Thank you!

relax carry on

Apart from VAT don't forget to factor in the Income tax, PRSI and USC which will be due on your non PAYE income through the self assessed route. All additional income must be declared to Revenue via a yearly tax return.