Part-time business question

FinoBlad

If you have a small part time business, at what point should you declare your earnings or register for VAT?

Victor

If the business is making a profit you need to declare that profit annually.

You need to register for and charge VAT if you turnover is over about €20,000 for services and €40,000 for goods.

Specky

If you're spending money at this stage it might be worth you registering for VAT anyway even if your turnover isn't high. At least you then get the advantage of being able to claim back the VAT on all of your purchases.

Victor

Originally posted by Specky
At least you then get the advantage of being able to claim back the VAT on all of your purchases.

Flip side is you have to charge VAT, even to non-VAT registered people, which doesn't make sense if you are selling mostly to private individuals.

FinoBlad

Most of my equipment has been accumulated over the years and mostly second hand so I couldnt claim for VAT on that.

Would the tax payable on profits be the same rate as my paye tax rate?

Victor

Originally posted by FinoBlad
Most of my equipment has been accumulated over the years and mostly second hand so I couldnt claim for VAT on that.

You may be able to write3 them off as capital expenses over a number of years.

Originally posted by FinoBlad
Would the tax payable on profits be the same rate as my paye tax rate?

Essentially yes. If you are near the top of the lower band, you might pay a mixture. However, it would only attact PRSI at 3% (some rules and limits involved in this). You would also pay the 2% levy. Drop into your local tax office - they have become a lot more customer focused - after all they are taking money from you and want you to part with it "willingly".

FinoBlad

Thanks Victor