Running a business from your home!

ButtermilkJack

I hope this is the right thread 'cos I couldn't find anything anywhere else.

I'm looking to register as a sole trader using my home as my business address. I've been told this can be advantageous as you can claim VAT on portions of your ESB/Telephone/Broadband/Gas bills etc.

Has anyone done this before? What does it involve (ie: accountants, insurance etc). I'm looking for advice really as well.

Thanks!

ranDom_tAsk

ButtermilkJack wrote:

I hope this is the right thread 'cos I couldn't find anything anywhere else.

I'm looking to register as a sole trader using my home as my business address. I've been told this can be advantageous as you can claim VAT on portions of your ESB/Telephone/Broadband/Gas bills etc.

Has anyone done this before? What does it involve (ie: accountants, insurance etc). I'm looking for advice really as well.

Thanks!

i'm in the same boat as you m8, i'm in the first few stages of setting up, i was going to start from home then go from there (get a unit after a few months) but if i was to set up from home it would be very risky in the sense of if you had a clent in your home-business and he slipped on your marble tiles and broke his arm, it would cost a fortune on insurance and he could sue your ass , and when you tell the insurance company that you're setting up at home i'm sure it will be very expesnsive...

i know i'm being very negitive about it but i'm not setting up at home.

"you can claim VAT on portions of your ESB/Telephone/Broadband/Gas bills etc"

and that is true

Figment

I operate from a home office.
insurance is not that expensive and most house insurance will now cover a home office up to the value of 5 grand. Its not that much extra to get public liability insurance.
In the year and a half i have been going i have never had to meet a client at home. I meet them at their office, hotel lobby or cafe.

You can claim a percentage of your household bills including rent for the business.

ButtermilkJack

Don't worry about being negative, everything helps!

So claiming VAT is true, excellent!! Clients slipping on your marble tiles, not so excellent. I see what you mean. Very risky. I'm not sure if I'd be having any clients around to my house though. I'd probably just meet them out for lunch. Really all I'm doing is registering as a sole trader so I can get a VAT number and do nixers at home. I'm a graphic/web designer and I already have a 9-5. The only reason I wanted to register the premises is to claim the VAT. I plan on putting as much through the expenses as I can. Mobile phone, ESB, Gas, Broadband, Computer and software etc..

secret_squirrel

ButtermilkJack wrote:

The only reason I wanted to register the premises is to claim the VAT. I plan on putting as much through the expenses as I can. Mobile phone, ESB, Gas, Broadband, Computer and software etc..

Bear in mind having a business requires you to have some turnover you cant just use it as a tax dodge. (I presume)

I would also presume it would mean having to complete vat and tax returns each year for the company. Plus then that means you might need to think about getting an accountant.

ballooba

Also if you live in an estate and you have delivery vans coming in and out all the time your neighbours will get p'ed off. Something about white van men knocking kids off their bikes.

Also depending on what business you are in you may inadvertantly be dealing with some unsavoury characters (e.g. IT wholesale and distribution). Do you want these people knowing where you live?

They're the negatives I have experienced from family experience.

Also by operating your business from your home do you put your home at risk in case the business fails?

ranDom_tAsk

ButtermilkJack wrote:

Don't worry about being negative, everything helps!

So claiming VAT is true, excellent!! Clients slipping on your marble tiles, not so excellent. I see what you mean. Very risky. I'm not sure if I'd be having any clients around to my house though. I'd probably just meet them out for lunch. Really all I'm doing is registering as a sole trader so I can get a VAT number and do nixers at home. I'm a graphic/web designer and I already have a 9-5. The only reason I wanted to register the premises is to claim the VAT. I plan on putting as much through the expenses as I can. Mobile phone, ESB, Gas, Broadband, Computer and software etc..

Great if like Figment you don't need clients to come to your business your sorted.

A graphic/web designer business would be an ideal home business, i was thinking along the lines of my own business (office/shop )

i registered with the cro office on the 28th of jan and i'm still waiting for my business name to pop up on the cro web-site ... I rang them up to see why it way taking so long, they said it takes 3 weeks to come up on the site if i register in the main office, but if i had registered on the site it only takes a few days :rolleyes: ...

so there a little tip for ya...

ranDom_tAsk

secret_squirrel wrote:

I would also presume it would mean having to complete vat and tax returns each year for the company. Plus then that means you might need to think about getting an accountant.

You don't really need an accountant at the start, get a book keeper, do as much of the books as you can then just give them to your book keeper to sort out for you, much cheaper.

ButtermilkJack

Yes I've looked into that and I do have to complete a VAT return every 2 months which is simple to do and doesn't require an accountant. However, there is a Tax return to be made every year which does require an accountant. (If anyone knows how much accountants charge for this please post, thanks).

As regards the turnover, I would hope the business makes a healhty turnover for its size. I wouldn't be looking to use it as a tax dodge at all. I'd just try to utilise as much of the benefits as possible without being greedy.

ranDom_tAsk

ButtermilkJack wrote:

Yes I've looked into that and I do have to complete a VAT return every 2 months which is simple to do and doesn't require an accountant. However, there is a Tax return to be made every year which does require an accountant. (If anyone knows how much accountants charge for this please post, thanks).

As regards the turnover, I would hope the business makes a healhty turnover for its size. I wouldn't be looking to use it as a tax dodge at all. I'd just try to utilise as much of the benefits as possible without being greedy.

don't quote me on this but i think you must have a yearly turnover of €50,xxx + to claim for VAT ?

you can also claim your accountant/book keeper on your VAT/Taxes

ButtermilkJack

Yes I saw that figure somewhere before, so I checked it out again. It refers to your 'obligations' to register for VAT. You are legally obliged to register for VAT if you turnover more than €51,000 (for goods) and €25,500 (for services) but you can register if you want even if your turnover is less.

madramor

1:
"you can claim VAT on portions of your ESB/Telephone/Broadband/Gas
bills etc"
this means that you must also charge vat on your sales.
so if your customers are not vat registered. it will make
your products more expensive

2:
you must pay business rates on the space you use for the business

3:

secret_squirrel wrote:

a)Bear in mind having a business requires you to have some turnover you cant just use it as a tax dodge. (I presume)
b)I would also presume it would mean having to complete vat and tax returns each year for the company. Plus then that means you might need to think about getting an accountant.

a) i worked in .coms that burned millions and had no turnover, so thats
not an issue
b)simple form each 2 months or yearly using ROS


4:

ballooba wrote:

Also by operating your business from your home do you put your home at risk in case the business fails?

running your business from home, will not have any effect on what happens
if your business fails

ranDom_tAsk

ButtermilkJack wrote:

but you can register if you want even if your turnover is less.

yeah, i'm going to register anyway, it doesn't make any difference really on VAT if i don't make a turnover of above €51,000

ButtermilkJack

madramor...

Thanks for that. You've cleared a few things up for me. Just a few questions on your first 2 points.

1) I intend charging VAT on all sales so hopefully that will mean everything will tally up with expenses etc. but my question is: How is it decided, or who decides, the portion to be claimed/paid on esb etc.

2) Can you tell me any more on this point? I haven't heard of this before. If I use a spare bedroom as an office how does this work in terms of space/rent.

Also, I agree with your point on the turnover. If I'm not making any money after a while I just stop trading and close the business. No harm done. Just a few euros down the drain!

ButtermilkJack

ranDom_tAsk wrote:

yeah, i'm going to register anyway, it doesn't make any difference really on VAT if i don't make a turnover of above €51,000

Exactly, that's why I decided to register. Also, it means you don't have to lose sales from customers who are fussy about getting VAT receipts. Makes sense really. It doesn't cost anything, except if you want to register a business name as well!!

ranDom_tAsk

ButtermilkJack wrote:

Exactly, that's why I decided to register. Also, it means you don't have to lose sales from customers who are fussy about getting VAT receipts. Makes sense really. It doesn't cost anything, except if you want to register a business name as well!!

yeah , btw it only costs €30 to register a business name, very cheap

egan007

You want to keep your 9-5 as well - i also want to do this.
What - if any, difference will that make to the amount of tax you have to pay on your earnings from the nixers.
Assuming you earned 30K in a 9-5 and paid your tax.
What rate of tax would you pay on your own earnings outside your taxed 9-5
If someone can answer this then Great

ranDom_tAsk

egan007 wrote:

You want to keep your 9-5 as well - i also want to do this.
What - if any, difference will that make to the amount of tax you have to pay on your earnings from the nixers.
Assuming you earned 30K in a 9-5 and paid your tax.
What rate of tax would you pay on your own earnings outside your taxed 9-5
If someone can answer this then Great

My post in this thread might help you

StaggerLee

you'd pay tax in the higher band if you earn more that 30k, thats if you pay yourself through your company. if you dont and declare evything as a profit you pay corporation tax on it, thats about 11%. sounds good, but i believe the govt have a way of getting more out of you....

a_ominous

I'm working for myself now. Well, technically I have my own company and contract my services out. I've only been at it for a few months now. But basically I payself a lower salary than I had received as a 'permanent' employee. Doing this so keep income tax at 42% to a minimum. I'll pay myself mileage rates at civil service rates (at the mo' 25 euro a day to customer office). This isn't taxed. Can also charge some house expenses to business. Not sure what the amount is yet, talking to the accountant next week.
At the end of the year, there will be some profits (hopefully!) which get taxed at 20%. If I take some dividends out of these profits, I'll be taxed at 42% as previously pointed out.

I'll also be charging relevant college fees to company. This is a _huge_ tax saving in my case. Course fees 10K per annum, so instead of earning 20K to pay 10K fees, the company pays 10K and writes off the amount against profits and hence tax.

So overall I should be on similar money, have the ability to claim mileage to go to work (on customer site) and have longer holidays. I don't necessarily have control over when the 'holidays' (read between jobs) occurs but at the mo' I'm hoping to take a month off this summer, when depends on when next contract starts and ends.

Just one comment about registering a company. CRO is getting quite active about this. If you don't file, late fees mount up quickly. And they're delisting companies who are not making returns. So either you use the company or wind it up before fees start to mount.

-ao-

PS the mileage rates apply whether you are self employed or not. You just have to agree them with your employeer. Difference for me now is I can claim the mileage travelling to work. You can't do that if you're travelling to your normal workplace which in my case is my home.

madramor

StaggerLee wrote:

you'd pay tax in the higher band if you earn more that 30k, thats if you pay yourself through your company. if you dont and declare evything as a profit you pay corporation tax on it, thats about 11%. sounds good, but i believe the govt have a way of getting more out of you....

Corporation Tax : 12.5 %

if you leave the money as profit and pay C. tax on it, the money belongs
to the company and not to you.

Victor

One more thing. Operating a business from home means for revenue investigation purposes your home is a business, not a home. This means they don't need a search warrant.

aphex™

Victor wrote:

One more thing. Operating a business from home means for revenue investigation purposes your home is a business, not a home. This means they don't need a search warrant.

Since when do u not need a search warrant to get into somebodys house?