Advice for Contracting on the side

ToxicPaddy

Ok, im looking for advice regarding contracting.

I currently work fulltime and ive been approached by a friend to help out with the IT stuff in a small company that he works in.

The company only has about 6 people, includes a small network setup by a contractor a few years back and maintained (very badly it seems) by a guy who used to work there but has now left.

The company is planning on getting in a few more staff, and is looking to update their IT systems.

Ok, so here's whats been proposed, they want me to:

- Source new equipment
- Upgrade the network and any systems that need upgrading
- Manage the network and resolve any IT problems that occur
- Work there for a few hours during the week & keep things up
to date. (evenings and weekends only)

So firstly, which is the best route to go?

Do I:

1 - Setup as a contractor, setup a company, get registered for VAT and such

2 - Setup as a sole trader and register for VAT

3 - Setup as a sub contractor, using the C45 route and get the to just issue me with one every month and they pay the income tax

Im not gonna rip them off so the rates will be fairly reasonable and its fairly constant work, so its a nice little earner, but they all want it above board and through the books.

But in saying that i dont want to be ripped off with tax and such so that its barely worth my while in the end.

So any advice is appreciated.

Thanks,

Tox

Cake Fiend

First make sure there isn't a clause in your current contract forbidding you to work for anyone else during employment in your current company. :ninja:

ToxicPaddy

Already done that and have been giving the go ahead..

Didnt plan on doing anything that would threaten my fulltime day job.

ToxicPaddy

Anyone got any advice please??????

vibe666

to be honest, I'd speak to the tax office if you're going to do it all above board, they won't try and rip you off, and they are the best people to speak to about it.

personally, I'd go the sole trader route, but you'd need to keep your payable tax straight or you might end up with a shock at the end of the year.

I'd say it really depends on how much you'll be earning and how much you are willing to mess around with it to pay the least tax possible.

might be worth figuring out exactly how much you'll be earning and how much the tax office will want you to pay to them, and then going to see an accountant for advice.

thegills

I would suggest the soletrader route as you have all of the benefits of VHI and pension in your full-time job (I hope). You'll probably pay the full whack of tax as your full-time job will use up your TFA. I'd also suggest you automatically put cash away each month for tax payments at year end.

Good luck anyway

thegills

Victor

I would advise one of two options sole trader or employee (no liability other than getting fired). Only register for VAT if the client is registered.

ToxicPaddy

Thanks for the advice guys..

The client is registered for VAT.. its a fairly big company worldwide but they only have a very small office in ireland and its mainly for business here to have some sort of presence in the country..

They arent really interested in a maintanence contract with a major reseller yet as the company is still small and cant justify the cost, so thats where I come in, Ill just pop in for a few hours each week and try and bring the network up to speed, try and improve whats there and the start sourcing the new equipment for them.

Im not gonna make a major amount of money from them but its more as a favour to my mate than anything else. But the money will come in handy

dazberry

Originally posted by thegills
I would suggest the soletrader route as you have all of the benefits of VHI and pension in your full-time job (I hope). You'll probably pay the full whack of tax as your full-time job will use up your TFA. I'd also suggest you automatically put cash away each month for tax payments at year end.

As a sole trader you get the choice of either paying a reduced PRSI contribution or a full contribution. I'm not a tax expert so I don't know if paying a reduced contribution would effect a full contribution from another job, so really that should be checked out.

ToxicPaddy
Also sole traders have to prepay tax in the second and subsequent years of trading. Be prepared.

D.