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Sole Trader for VAT back

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  • 20-02-2017 3:36pm
    #1
    Gwagon90
    Registered Users Posts: 9 ✭


    Hi Guys.

    I recently brought a House which is in need of a lot of renovation. ie lots of materials need to be brought for the build.

    I am currently a PAYE Employee.

    I'm wondering is it possible set up as a sole trader on the side, therefore being able to claim all my VAT back on purchases.

    What is the related cost with setting up as a sole trader

    Any info appreciated!


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    #2
    StupidLikeAFox
    Registered Users Posts: 7,711 ✭✭✭StupidLikeAFox


    Sounds great on paper but I don't think you will pull this off.

    First of all you will have to set up a business (doing what?) and register the business name. Then you will have to register for VAT. You will have to submit bi-monthly returns where you declare the VAT you have spent vs the VAT you have charged your customers and pay/get refunded the difference. In your case you won't have any customers, just a **** load of VAT to be refunded.

    This will set off all sorts of alarm bells with revenue. They have a sophisticated IT system (its called REAP) and you will show up on this. It will be another red flag that you have a residential address too.

    In short, its a bad idea, don't think you will pull the wool over Revenue's eyes and get away with it.


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    #3
    Gwagon90
    Registered Users Posts: 9 ✭Gwagon90


    Cheers for the advice,Ya I see where you are coming from.
    I would be able to set up a legit Elec company but I'm so busy with my employer there wouldn't be a whole pile of jobs going through the books in the new company.
    If somebody (a friend) were to purchase these materials for me as a favor would it affect their books?


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    #4
    CIARAN_BOYLE
    Registered Users Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    Gwagon90 wrote: »
    Cheers for the advice,Ya I see where you are coming from.
    I would be able to set up a legit Elec company but I'm so busy with my employer there wouldn't be a whole pile of jobs going through the books in the new company.
    If somebody (a friend) were to purchase these materials for me as a favor would it affect their books?

    The question is who is being sold something. The end consumer is supposed to pay VAT unless it's a legitimate business expense. Renovating your private dwelling isn't so you are asking us to advise you on how best to cheat the Revenue.

    If your friend was to buy the goods he would have to charge vat when he sold them to you. If he didn't he would be cheating the Revenue.


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    #5
    Nody
    Moderators, Category Moderators, Arts Moderators, Business & Finance Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 18,315 CMod ✭✭✭✭Nody


    Mod:
    OP while your direct tax question has been answered I've moved your post to the Entrepreneurial forum simply because it is overall more suited for the idea of setting up a small home business in some form.


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    #6
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Gwagon90 wrote: »
    .............

    I recently brought a House which is in need of a lot of renovation. ie lots of materials need to be brought for the build....................
    Gwagon90 wrote: »
    Cheers for the advice,Ya I see where you are coming from.
    I would be able to set up a legit Elec company but I'm so busy with my employer there wouldn't be a whole pile of jobs going through the books in the new company.
    If somebody (a friend) were to purchase these materials for me as a favor would it affect their books?

    Yes, because what they were buying wasn't for their business, it was for their friend's house renovation.
    CIARAN_BOYLE wrote: »
    The question is who is being sold something. The end consumer is supposed to pay VAT unless it's a legitimate business expense. Renovating your private dwelling isn't so you are asking us to advise you on how best to cheat the Revenue.

    If your friend was to buy the goods he would have to charge vat when he sold them to you. If he didn't he would be cheating the Revenue.

    OP, there is no way that renovating a private house can be done legitimately by purchasing the materials through your or anyone else's company with the intention not to pay VAT out of your pocket.


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    #7
    StupidLikeAFox
    Registered Users Posts: 7,711 ✭✭✭StupidLikeAFox


    Gwagon90 wrote: »
    Cheers for the advice,Ya I see where you are coming from.
    I would be able to set up a legit Elec company but I'm so busy with my employer there wouldn't be a whole pile of jobs going through the books in the new company.
    If somebody (a friend) were to purchase these materials for me as a favor would it affect their books?

    You can only reclaim VAT on stuff you use for your business. So even if you have a company and registered for VAT you will still pop up on the radar if you have lots of expenses but no customers, and when they do the minimum amount of digging they will find all these building supplies were purchased for your house.

    If you have a friend who you got to purchase the materials they would have to put the purchases through their books in order to reclaim the VAT. This may be easy or hard to hide, but its still fraud and a risk. The risk would be all on your friends side though as they would be the ones fraudulently claiming the business expenses


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    #8
    Gwagon90
    Registered Users Posts: 9 ✭Gwagon90


    God loves a trier lads!!


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    #9
    capefear
    Registered Users Posts: 773 ✭✭✭capefear


    http://www.revenue.ie/en/tax/it/reliefs/htb/index.html

    This might be of some help to you


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