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Corporation tax on side hustle businesd

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  • 26-05-2023 9:38am
    #1
    kdowling
    Registered Users Posts: 375 ✭✭


    I have a full time PAYE job and I have a side business that turns over €500,000 with a net profit of €100,000

    I don’t take a wage as I don’t really need to and my plan is to build up the company over the next few years and sell it on.

    my question is, as I don’t take a wage the net profit is higher and is obviously subject to corporation tax.

    is there any way this can be done where I can reduce my corporation tax liability without taking a wage?



Comments

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    #2
    retalivity
    Registered Users Posts: 14,242 ✭✭✭✭retalivity


    Pension the profit?



  • Options
    #3
    afatbollix
    Registered Users Posts: 4,058 ✭✭✭afatbollix


    Pension, Company cars & more expenses is the only way to get it down.



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    #4
    ahnowbrowncow
    Registered Users Posts: 2,572 ✭✭✭ahnowbrowncow


    https://www.boards.ie/discussion/comment/120642085#Comment_120642085

    Surely a company car is not very tax efficient when you'll have to pay BIK on it.



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    #5
    afatbollix
    Registered Users Posts: 4,058 ✭✭✭afatbollix


    Electric cars have better BIK. I'm unsure of the exact rates but you can ask your accountant.



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    #6
    ELM327
    Registered Users Posts: 21,936 ✭✭✭✭ELM327


    If you can create expenses this the best way of getting cash out of a business to reduce tax liability. Pension contributions are the next best



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    #7
    Peregrinus
    Registered Users Posts: 26,438 ✭✭✭✭Peregrinus


    https://www.boards.ie/discussion/comment/120642137#Comment_120642137

    Cars in general are not very tax efficient as cars themselves are taxed quite heavily, and do not hold their value well. Buying a heavily taxed wasting asset as a mechanism for reducing your tax bill is . . . perverse.



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    #8
    Mrs OBumble
    Registered Users Posts: 25,899 ✭✭✭✭Mrs OBumble


    With that level of profit, you can afford to buy proper tax-planning and succession planning advice. And you should do that.



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    #9
    Mick Tator
    Registered Users Posts: 670 ✭✭✭Mick Tator


    So if your side hustle is making more than €100k p.a., your PAYE job must be making you considerably more (else why that hassle?). That means your annual income could be more than €200k. To minimise tax and take cash out of the company  you could easily afford to contribute the maximum to a pension plan. The total permitted is capped by allowable salary limit (€115k) and age related -  

    The age-related percentage limits are:

    Up to 30 years 15% of remuneration/net relevant earnings

    30 – 39 years 20%

    40 – 49 years 25%

    50 – 54 years 30%

    55 – 59 years 35%

    60 years +     40%

     With that amount of income why not use a professional instead of using Boards?



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