Am i A Company or Not?

madmik

recently I have been selling handpainted pictures on online sites

Last month my sales total was €2500

I am an individiaual who works a normal job as well so this is just a hobby for me to do in the evenings or weekends

I expect to double this figure to around €5000+ when i give up my day job and start painting full time

Do i have to register as a business or a company yet?

Are theyre any benefits?

how much money can i earn as an individual?

should i be keeping receipts for paint costs,canvas,brushes packing materials,courior delivery dockets etc?

When i register to get taxed on this income will i need receipts to claim for these costs?

Is it easy to register a comapany and get a vat number?

sorry if these questions are stupid but im not well up in this kind of thing...

Joseph

Think you only need a VAT number if you earn over 26k a year am I right?

And isn't being an artist tax free

madmik

Im not sure any income is truely tax free
especially if it starts pulling in more than 5000 a month
that works out over 60,000 a year

surely that couldnt all be tax free? could it?

shoutman

AFAIK once you are the one painting the pictures then it is tax free.

Artists, Musicians, writers etc. are exempt from tax, some sort of cultural thing...

Axwell

Deaddude wrote: »

Think you only need a VAT number if you earn over 26k a year am I right?

And isn't being an artist tax free

No you are not right the threshold is €37,500 - link see section 2.2

For the OP check here for the details on artists and tax

madmik

thanks for those answers

it seems i will definately exceed the threshhold of 37,000 a year

is it better to register as a business sooner rather than later?

are there any advantages?

could i claim on all the related expenses i incur?

Axwell

You can claim on expenses once registered, when doing your vat returns every 2 months you can claim any VAT you paid for that period. You should read over the other sections of the Revenue website for Businesses and possibly talk to an accountant for some advice.

madmik

id just hate to be taxed on the total turnover as 100% profit as that is just not the case

I buy and use expensive paints/materials and packaging etc and delivery is expensive as these items are bulky and fragile and must be really well packed and insured

Also advertising costs must be taken into consideration and auction fees etc

I reckon expenses are costing me 50% of the final purchase price so if there was an way to write off these costs it would be great

Culchie

madmik wrote: »

id just hate to be taxed on the total turnover as 100% profit as that is just not the case

I buy and use expensive paints/materials and packaging etc and delivery is expensive as these items are bulky and fragile and must be really well packed and insured

Also advertising costs must be taken into consideration and auction fees etc

I reckon expenses are costing me 50% of the final purchase price so if there was an way to write off these costs it would be great

You need to VAT register yourself, your sales will be tax exempt, your expenses can be VAT deducted.

You will pay Income tax on the acculmulative of your 'business' plus your other income....whatever that adds up to be.

antoinolachtnai

He will have to charge VAT on sales within the EU though, no?

Axwell

antoinolachtnai wrote: »

He will have to charge VAT on sales within the EU though, no?

If you register for VAT you have to charge it aswell as claim it so yes, he would have to file returns every 2 months.

Culchie

antoinolachtnai wrote: »

He will have to charge VAT on sales within the EU though, no?

Even for his sales in Ireland at 0%, he still needs to report the sales figure, so he needs to register for VAT.

antoinolachtnai

At 0 percent?! Where does it say that paintings are zero-rated?

Appendix G of

http://www.revenue.ie/leaflets/vatguide_2008.pdf

suggests to me that works of art are taxable at 13.5 percent. But I am open to correction.

Culchie

antoinolachtnai wrote: »

At 0 percent?! Where does it say that paintings are zero-rated?

Appendix G of

http://www.revenue.ie/leaflets/vatguide_2008.pdf

suggests to me that works of art are taxable at 13.5 percent. But I am open to correction.

I have no idea, someone said (in this thread) it was zero rated so I took at at face value.

What I'm saying is even if it is at zero %, he still needs to registered, and he still needs to report the Sales Vat figure at 0%.