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Start a part time business

  • 15-12-2008 4:24pm
    #1
    houseoffun14
    Closed Accounts Posts: 98 ✭✭


    I am currently a PAYE worker, however I am looking to set-up a part time business to generate extra income, while retaining my PAYE status.
    I am looking to see what is the best way to go about this, from the point of view of tax, registering the business etc.

    Any advice or information would be very welcome


Comments

  • #2
    sm.org
    Closed Accounts Posts: 456 ✭✭sm.org


    If its a service your providing then your VAT limit is €37,500 , if your selling goods then its €75,000. Anything below this you are not required to register for VAT.

    Personally I'd register the business and avoid registering for VAT if possible. It wont affect your PAYE status.

    If you your customers,may they be many, require a VAT number from you this may be a problem.


  • #3
    Mr Clonfadda
    Registered Users, Registered Users 2 Posts: 372 ✭✭Mr Clonfadda


    Are you setting up a company or not? If not you will need to register your business name if not trading under your own name.

    Depending on the type of business you may also have to register with a regulatory body etc.

    You do not need a VAT number to trade only if you hit turnover rate as indicated by previous poster.


  • #4
    BenjAii
    Closed Accounts Posts: 545 ✭✭✭BenjAii


    Your profit, will be taxed as an addition to your current salary or as capital gains, either of which could see a lot of it going to the government. One way to avoid this, is divert a portion to a pension fund. This portion you can keep free of any taxes.


  • #5
    sm.org
    Closed Accounts Posts: 456 ✭✭sm.org


    BenjAii wrote: »
    Your profit, will be taxed as an addition to your current salary or as capital gains, either of which could see a lot of it going to the government. One way to avoid this, is divert a portion to a pension fund. This portion you can keep free of any taxes.

    Until he/she goes to withdraw it and pays the same rate of tax anyway. Capital gains tax is what 22% or so, stick it in a pension fund, pray it makes money and pay 41% tax on your withdrawal. Not for me.

    Slightly off topic, is anyone else concerned that we are now using the pension reserve fund to rescue the same institutions that are the reason that pensions are worth at best 40% of what they were 12 months ago?

    Before I get shouted down I completely agree that they need to be recapitalised and am fully aware of the consequences of the banks collapsing.


  • #6
    BenjAii
    Closed Accounts Posts: 545 ✭✭✭BenjAii


    sm.org wrote: »
    Until he/she goes to withdraw it and pays the same rate of tax anyway. Capital gains tax is what 22% or so, stick it in a pension fund, pray it makes money and pay 41% tax on your withdrawal. Not for me.

    Confused by what you mean here ? :confused:

    Gains in a pension fund over its lifetime are tax-free, whatever income the pension generates on retirement is subject to ordinary income tax.


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  • #7
    R3al
    Closed Accounts Posts: 303 ✭✭R3al


    BenjAii wrote: »
    Confused by what you mean here ? :confused:

    Gains in a pension fund over its lifetime are tax-free, whatever income the pension generates on retirement is subject to ordinary income tax.

    I think what he means is the normal income tax that a pensioners income would be subject to, and that if your pension is in anyway decent you will end up paying the higher rate of tax(on a proportion of the income anyway) which means that it is a bit of a myth that pension contributions are saving you tax, really you are just deferring payment of the tax until you retire.

    Getting back to the original post, registering for VAT even if you don't hit the threshold may be beneficial as you can claim the VAT back on all your purchases for the business including Diesel if your car takes that fuel. Furthermore not being registered for VAT and not having a VAT number advertises that you are a very small business which may not be the image you are trying to project


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