Start Up - Student Enterprise

ironclaw

Hi There,

Apologises if this has been asked before but here we go.. A mate of mine and myself are starting up a business. It will be online and one-on-one based with eventually supplies to major companies (fingers crossed) Now, we're abit hazy on the whole Tax and VAT area so can anyone point us in the right direction?

We'll need a VAT number as we'll probably need one for major companies to even talk to us. We probably won't be in the millions in terms of turnover for quite some while, so we probably shouldn't break the income tax barrier.

PLC or Sole Trader, which is more desirable? We don't have a huge amount of capital for this start up so we really want to keep the money going out to a minimum.

Is it worth dropping into Revenue and having a chat to them? Or is it more a Citezens information area?

Thanks!

Joseph

Get in touch with your local county enterprise board, they'll help you out alot with any questions and even give you a mentor

enviro

I'm not sure how much help revenue would be, Citizens information is a good resource. Try them and I'd talk to your local enterprise board if I were you for general advice.
It would be advised to get yourself an accountant for your books as well.

Ironé

Get in touch with an accountant and they'll give you good advice on what you should do. I've just done the same myself lately. You will need to register the company name if you haven't done so already, register for VAT if your earnings would be over a certain amount. Fill in a T1 form to say you have started trading - sole trader might be best at the beginning but do talk to an accountant. You'll need one to do your taxes anyway in October.

Good Luck!

ironclaw

Thanks for all the reply's folks. I'll get in touch with the Enterprise Board asap.

Ironé wrote: »

VAT if your earnings would be over a certain amount

What is the cut off point by the way?

enviro

ironclaw wrote: »

Thanks for all the reply's folks. I'll get in touch with the Enterprise Board asap.



What is the cut off point by the way?

Afaik everyone is different and you under go an assessment to determine this.

Bellies

Hi there,

I'm just out of college myself and set up a VAT number for a small operation.

Call into your local revenue office and complete the necessary forms. It usually takes about 3-4 weeks for a number to be issued.

As far as I know if your operating on your own as a sole trader they'll use your PPS number!

So far I've had no problems with the VAT system here in Ireland and if you have a close buddy whose an accountant your laughing as they'll show you all the tricks on how to claim back the VAT on everything you purchase! (Drinks anyone!!!)

However, one major problem that I have experienced is a "self assement income tax form" must be completed by the 31st of Oct. each year as well as tax return every month (for me, but it can be two). But other than that... I'm sure you'll survive.

Good Luck to you!

ironclaw

Bellies wrote: »

Hi there,

I'm just out of college myself and set up a VAT number for a small operation.

Call into your local revenue office and complete the necessary forms. It usually takes about 3-4 weeks for a number to be issued.

As far as I know if your operating on your own as a sole trader they'll use your PPS number!

So far I've had no problems with the VAT system here in Ireland and if you have a close buddy whose an accountant your laughing as they'll show you all the tricks on how to claim back the VAT on everything you purchase! (Drinks anyone!!!)

However, one major problem that I have experienced is a "self assement income tax form" must be completed by the 31st of Oct. each year as well as tax return every month (for me, but it can be two). But other than that... I'm sure you'll survive.

Good Luck to you!

Thanks for the reply. I'll give them a call this week if I get a chance.

pwd

Unless you have large capital from somewhere, or unless you expect to be very profitable straight away, I think you would be better off doing your own books than using an accountant. It's very straightforward to do a tax return.

Bellies

I agree it is easy to complete a tax return, but if you have friends who did accountancy in college call on them to do your books and write off fuel, food etc as expenses. After all its free!

ironclaw

pwd wrote: »

Unless you have large capital from somewhere, or unless you expect to be very profitable straight away, I think you would be better off doing your own books than using an accountant. It's very straightforward to do a tax return.

Oh, so you don't need an accountant straight away? Is there a cut off for when you do? I honestly don't think we'd be in region of €5000 per year (profit) for a while aways.

pwd

Well there's no point where you're legally required to have an accountant, if that's what you mean. It's up to the individuals concerned - when they think the returns are getting too complicated - or think that they could be saving much more on expenses etc - then they're probably better off getting an accountant.

ironclaw

pwd wrote: »

Well there's no point where you're legally required to have an accountant, if that's what you mean. It's up to the individuals concerned - when they think the returns are getting too complicated - or think that they could be saving much more on expenses etc - then they're probably better off getting an accountant.

Thanks PWD. I think I will avoid an accountant for the time being as I just don't have the capital.

This may sound very naive, but what constitutes keeping books? I am very law abiding and really want to do this on the level. Is an Excel book with all my sales etc in addition to paper receipts as good as anything?

Also, as regards the tax return, does that become more difficult if I am working at the same time? This is more of a sideline to keep the rent and not my full time job.

Thanks folks, you've been invaluable.

ironclaw

ironclaw wrote: »

Thanks PWD. I think I will avoid an accountant for the time being as I just don't have the capital.

This may sound very naive, but what constitutes keeping books? I am very law abiding and really want to do this on the level. Is an Excel book with all my sales etc in addition to paper receipts as good as anything?

Also, as regards the tax return, does that become more difficult if I am working at the same time? This is more of a sideline to keep the rent and not my full time job.

Thanks folks, you've been invaluable.

HI Buddy

Set yourself up as a Sole Trader, just register your business name in the CRO office and apply for your VAT number. Limited company is to protect directors against liability so that they cant be sued personally. Small business like yours is suitable for sole trader.
Keep a record of all your transactions in a Cash Book, everything that goes in and out, and keep a record of all your receipts. At the end of the year you'll get forms in the post from the revenue where you'll be required to show what youve earned and your expenses and then you pay tax on the balance. Worry about that stuff then, its quite simple to do and if by chance your business gets big, you'll be able to afford and accountant to handle it for you

flash harry

Bellies wrote: »

write off fuel, food etc as expenses. After all its free!

make no mistakes what you are suggesting is revenue fraud - not judging, just pointing out - if its not solely and exclusively for business purposes it's not a business expense and therefore not deductible.......now, where's my halo......

flash harry

flash harry wrote: »

make no mistakes what you are suggesting is revenue fraud - not judging, just pointing out - if its not solely and exclusively for business purposes it's not a business expense and therefore not deductible.......now, where's my halo......

Yeah the last time I had to look there was details of how much you can claim back per mile from your petrol expenses etc. The tax in ireland is based on the honesty system, just dont get greedy claiming back expenses that werent expenses and there'll be no problems

Bellies

flash harry wrote: »

make no mistakes what you are suggesting is revenue fraud - not judging, just pointing out - if its not solely and exclusively for business purposes it's not a business expense and therefore not deductible.......now, where's my halo......

Thanks for highlighting that harry!

lecheile

Hi ironclaw - I would not go rushing into registering for VAT at the start. You can supply goods of up to €75k (services - half that) before you must register. You will save yourself a while lot of paperwork. If things go well you can register at a later date. Bear in mind that your goods or service will need to be competitively prices if you need to add VAT on in the future.

See this link for more detail http://www.accountingnet.ie/channels/taxation/vat.php


Good luck!

PS - before you go getting all excited about being able to drink VAT free - its not reclaimable, even if you can justify as a business expense.

ironclaw

lecheile wrote: »

Hi ironclaw - I would not go rushing into registering for VAT at the start. You can supply goods of up to €75k (services - half that) before you must register. You will save yourself a while lot of paperwork. If things go well you can register at a later date. Bear in mind that your goods or service will need to be competitively prices if you need to add VAT on in the future.

Thanks for the link. I saw that about the VAT limit. So does that mean I don't charge VAT if my turn over is below the set figures? I just pay income tax on my profit I presume?

Thanks!

lecheile

ironclaw wrote: »

Thanks for the link. I saw that about the VAT limit. So does that mean I don't charge VAT if my turn over is below the set figures? I just pay income tax on my profit I presume?

Thanks!

Yes. You can sell products up the level without adding on VAT. Be careful though, if you go over that level your sales price will either have to increase by the VAT rate or your profit margin reduce, or a combination of the two - important to have that in mind now if it is likely to happen in the year, esp if you are setting your price against a competitive offering.

I hope this makes sense!!

Innov

You can get mentoring and help from TSSG www.tssg.org . For funding needs you enter the eircom web innovation completion http://labs.eircom.net . They somehow work together.

ironclaw

Thanks folks. This seems abit easier than I thought. Phew! :pac:

John Cusack

I have recently wrapped up a business in Ireland..... And my major f**k up was not having done my book-keeping correctly!!..... It is extremely important to keep your taxes in order, especially VAT, as you are only collecting this money for the government..... There are many different software packages out there to help you do this and this will minimise your accountants fees. A company called "Sort My Books" are based in Kerry and their software is extremely easy to use. I would highly recommend it. Unfotunately, I found out about it to late.... I really can't praise this company enough... Please check them out right at the beginning and see if the suit you... I wish I had to!!....... Good luck!!!