Business owner - No PAYE PRSI benifit.

Philbert

Hi folks,

I am a self employed business owner and I pay PAYE and PRSI just like everybody else. I realise that I lost my PAYE tax credit (€1,760) when incorporating and becoming a director of my company and I have accepted that, although I still don’t quite understand it.

What has surprised me though is the other day I was hit with a dental bill of just over €400 and told that I do not “qualify” for anything under PRSI. I called the number they gave me (not quite sure what office/dept it was) and I was told that, as a self employed person I am not entitled to that either.

So, I pay a bucket load of PAYE, 5% PRSI and I am not entitled to any of the benefits I would normally be entitled to? Can anybody comment on why this is the case? Or perhaps I am going about it the wrong way or I am missing something?

Thanks

EKRIUQ

Yes that's correct, its a right load of bollacks, you(and I) pay loads of prsi, loose our tax credits and get screwed wilth dental bills its just a pain in the arse. I felt the same when I checked out this also.

eoinhealy

Philbert wrote:

I realise that I lost my PAYE tax credit (€1,760) when incorporating and becoming a director of my company and I have accepted that, although I still don’t quite understand it.

Pilbert, I'm not too sure but if you are a ltd company you can set your self up as an employee of your own company and then pay paye and prsi like everyone else, have a tax credit. So if i'm right, you should be able to claim benifits ie your dentist.

Dont quote me, but I think it is worth looking into. And if you find out anything insteresting let me know because I have hopeing to move from being a sole trader to forming a ltd company.

Hope it helps
Eoin:)

Philbert

eoinhealy wrote:

Pilbert, I'm not too sure but if you are a ltd company you can set your self up as an employee of your own company and then pay paye and prsi like everyone else, have a tax credit.

Eoin, that is exactly my situation, I am an employee (director) of my own ltd company. You automatically loose your PAYE tax credit and are not entitled to PRSI benefits because you are in a different PRSI "class".

information

Philbert wrote:

So, I pay a bucket load of PAYE, 5% PRSI and I am not entitled to any of the benefits I would normally be entitled to? Can anybody comment on why this is the case? Or perhaps I am going about it the wrong way or I am missing something?
Thanks

You are paying prsi at 5% if you where a normal employee it would be closer to 15% between company and employee, so you have a hugh saving

eoinhealy wrote:

Pilbert, I'm not too sure but if you are a ltd company you can set your self up as an employee of your own company and then pay paye and prsi like everyone else, have a tax credit. So if i'm right, you should be able to claim benifits ie your dentist.

as a proprietary director you cannot do that

antoinolachtnai

You do pay less PRSI than people who are not self-employed.

HAPPYGIRL

If the company is a limited company, then you can set yourself up as an employee and the treatment of rsi is the same as any other employee.
An even better way of dealing with this, if you are a director, is to keep all your medical and dental bills and submit them to your accountant with your accounts. They are treated as allowable expense.

HAPPYGIRL

information wrote:

You are paying prsi at 5% if you where a normal employee it would be closer to 15% between company and employee, so you have a hugh saving


Where is the huge saving your talking about? Employees pay either 0%, 2.5%, 4% and a top rate of 6%. Its the employer that pays 10.75% for them.
Employers pay 5% for themselves, and lose most of the benefits paye employees recieve.

antoinolachtnai

No, you can't. If you are a proprietary director (i.e., you own the company) you are not eligible to pay 'A' stamps.

Certain types of medical and dental expenses are deductible, but this is the case whether you are a director or not.

information

HAPPYGIRL wrote:

If the company is a limited company, then you can set yourself up as an employee and the treatment of rsi is the same as any other employee.

As stated already you cannot do that

HAPPYGIRL wrote:

An even better way of dealing with this, if you are a director, is to keep all your medical and dental bills and submit them to your accountant with your accounts. They are treated as allowable expense.

they are not

HAPPYGIRL wrote:

Where is the huge saving your talking about? Employees pay either 0%, 2.5%, 4% and a top rate of 6%. Its the employer that pays 10.75% for them.
Employers pay 5% for themselves, and lose most of the benefits paye employees recieve.

the saving is 5% vs 15%, its all his money as he is the employee and employer
So the hugh saving is 10% of his salary

HAPPYGIRL

the saving is 5% vs 15%, its all his money as he is the employee and employer
So the hugh saving is 10% of his salary[/QUOTE]

If he was just an employee, he'd just be paying the employee share.
You dont pay twice. so there is no saving.

Medical and dental expenses are allowable expenses.

egan007

Wow so much misinformation here.

I'd advise anyone to Double check with the revenue.

Philbert

Its amazing the conflicts of information you get on the interweb!

HappyGirl, Information is right in this case because it is all my own money at the end of the day so I (personally) would have to pay both the employees and the employers share of PRSI.

Thanks for your replies folks, its all a little clearer for me now. But regarding allowable expenses can we just clarify this?

HAPPYGIRL

The 15% rsi thats being quoted here is if an employee and employer, (being seperate entities), both contribute. You are self-employed so the 5% rate applys. if you worked for someone else you personally would not pay more than this.

It never arises that one person has double the burden. so there is no saving.

Check with your accountant, but medical and dental expenses are allowable.

information

HAPPYGIRL wrote:

You are self-employed

he is not self employed,
thats what could be confusing you

HAPPYGIRL

Philbert wrote:

Hi folks,

I am a self employed business owner and I pay PAYE and PRSI just like everybody else. I realise that I lost my PAYE tax credit (€1,760) when incorporating and becoming a director of my company and I have accepted that, although I still don’t quite understand it.

What has surprised me though is the other day I was hit with a dental bill of just over €400 and told that I do not “qualify” for anything under PRSI. I called the number they gave me (not quite sure what office/dept it was) and I was told that, as a self employed person I am not entitled to that either.

So, I pay a bucket load of PAYE, 5% PRSI and I am not entitled to any of the benefits I would normally be entitled to? Can anybody comment on why this is the case? Or perhaps I am going about it the wrong way or I am missing something?

Thanks

The op refers to himself as self-employed, i understand he is a director of his company. There is no confusion on my part, my point still stands.

Philbert, if you need advice on deductable expenses you should ring revenue and they'll send you all the information you need. alternatively your accountant will go through it with you. Just keep all your receipts.
good luck with the company.

information

HAPPYGIRL wrote:

If the company is a limited company, then you can set yourself up as an employee and the treatment of rsi is the same as any other employee.

He cannot do the above, but if he could

then he would be paying double both the employer and the employee part.

HAPPYGIRL wrote:

You are self-employed so the 5% rate applys. if you worked for someone else you personally would not pay more than this.

Incorrect,
if he worked for someone else he would pay the standard rate of prsi.

HAPPYGIRL

information wrote:

Incorrect,
if he worked for someone else he would pay the standard rate of prsi.

Yes that obvious, but if you apply the standard rates (2%,6% and 6.5%).
it averages out at around 5% in most cases.

Thats my point, he still pays around the same level of prsi, but without most of the benefits.

latenia

Philbert wrote:

I realise that I lost my PAYE tax credit (€1,760) when incorporating and becoming a director of my company and I have accepted that, although I still don’t quite understand it.

The benefits, both official and 'dodgy', of being a director of your own company or self-employed rather than a PAYE worker is the explanation for this.

information

HAPPYGIRL wrote:

Yes that obvious, but if you apply the standard rates (2%,6% and 6.5%).
it averages out at around 5% in most cases.

Thats my point, he still pays around the same level of prsi, but without most of the benefits.

who do you think will believe that was your point