Running a service business in Ireland

Pip1989

Hey all, I just wanted to ask a few other people who are also running their own business what they think about running a business in Ireland with our vat and income tax rates etc.

So I run a cleaning services company and I am going into my 4th year running now and think I may need to register for VAT next year as with the way business is going, I will go over the threshold. Because 90% of my services are domestic, I cant just add VAT to my prices as this would put my prices too high, so I would need to keep at a similar price.

What I am wondering, for other people who run business, is it even worth the effort of working all that extra work and making all that extra income, for example if I made 60,000 next year, which would mean earning an extra €22500, I would have a VAT Bill of €8100 meaning I would need to do €22500 worth of extra work just to have an extra €14,400 and then also pay my income tax on that. It just seems like I would be doing an extra €22500 worth of work just to make an extra €10,000. Doesnt seem worth all that extra work, or am I missing something?

Is it just me or is that tax in this country for business owners very high, VAT then income tax then prsi and usc, bascially taking 60% of nearly all your income, makes me wonder if I should just go back working for someone, less hassle and making similar if not nearly more money.

Also another thing I am wondering are there any grants or incentive moey for business owners who want to expand or upscale, for example I would love to move into bigger cleaning jobs like pressure washing etc, but would require a lot of extra money to invest which I dont have, is there any incentives or grants available for sole traders?

Looking forward to hearing feedback,

Thanks all

Gloomtastic!

I hear your pain. House cleaning is usually a cash business but you've done things properly and are now going to get punished for it.

It's not that the tax rate is too high. It's the threshold, the amount you can earn before VAT kicks in, is too low. For delivering services, in Ireland, it's €37.5k while it's £85k in the UK.

What to do about it? Try and get more commercial clients? They can claim back any vat you charge them.

walterking

Get an accountant.

The limit is 37.5k plus the vat. So about 43k

If you have staff, change them to contractors and take a facilitation fee from them and have your accountant do their accounts (hair salons work this way)

If you do that only the facilitation fee is subject to vat. You yourself can be a contractor to your company too.

And remember that as you use your car to get to clients, you can claim mileage tax free at civil servant rates.

Above all, get an accountant and they should make it a lot easier for you.