Paying tax from money made from website.

bigbadcon

Hey guys,

Just wondering if any of you could give me some insight into how you go about paying tax on money you made from a website.


Lets say for example I make a site that charges you for posting something on the site. (there is no items for sale or stock or anything)

What sort of tax implications do I need to worry about....

As far as im aware you need a tax number for a .ie domain (correct me if im wrong) but if its a .com name where does that leave me?

Do I need to set up a company....

Any help is appreciated.

Sully

You need to register your business name with the CRO, which will allow you buy a .ie. There are no restrictions for .com domains. With regards to paying tax, if your earning over a certain amount per year you will get taxed. I think you need to declare all income anyway, which means registering with the Revenue.

Best bet is to speak with an accountant or your local enterprise board.

p

You don't need to set up a company. You can just register as a Sole Trader, which basically means at the end of the year you fill out some forms saying that you sold 5000 worth of stuff on your site, spent 3000 on goods/expenses/bills and then pay tax on the 2000 profit. It's not too difficult to get your head around, and the ros.ie website makes it very easy.

TheWaterboy

As P said - register as a Sole Trader. It costs about 30 euro. Though its quite easy to work out your income and costs from the site, its probably worth using the services of an Accountant as they can advise you further on what exactly you can use as expenses.

The thing that kills me is that in September now I have to pay tax for 2008 but also preliminary tax for 2009. This can be a killer on cash flow.

bigbadcon

Id say the cash coming in for the site would be very little... if any. I only made the site to learn about web development and it might be a complete flop.

Im just wondering is there any way my employer can view the money ive made at the end of the year?

It might be in breach of my contract...

p

TheWaterboy wrote: »

As P said - register as a Sole Trader. It costs about 30 euro. Though its quite easy to work out your income and costs from the site, its probably worth using the services of an Accountant as they can advise you further on what exactly you can use as expenses.

The thing that kills me is that in September now I have to pay tax for 2008 but also preliminary tax for 2009. This can be a killer on cash flow.

There's actually no charge to register as a Sole Trader (why would the charge you if you wanted to pay tax )

The preliminary tax thing is only a problem for one year.

bigbadcon wrote: »

Id say the cash coming in for the site would be very little... if any. I only made the site to learn about web development and it might be a complete flop.

Im just wondering is there any way my employer can view the money ive made at the end of the year?

It might be in breach of my contract...

I'd say just build the site and see what happens. If you're earning only a few hundred euro a year from it, that's pocket money, however, if it does start to take off then go legit.

I'd be surprised if you'd be in breach of contract. As far as I know, there's very little your employer can do about what you do outside working hours.

bigbadcon

p wrote: »

I'd say just build the site and see what happens. If you're earning only a few hundred euro a year from it, that's pocket money, however, if it does start to take off then go legit.

That sounds like it makes sense. Think il go with that.

Or if I do make millions I can pay someone else to sort out my tax for me muhuhahahahaaaa

Thanks for the replies guys

Eoin

bigbadcon wrote: »

Im just wondering is there any way my employer can view the money ive made at the end of the year?

It might be in breach of my contract...

In a quite similar position actually. My accountant assures me the two things are separate.

Definitely read over your contact. I was worried about this, but mine said nothing about doing work on the side. There were standard provisions about IPR and competing, but that was fine.

Axwell

p wrote: »

There's actually no charge to register as a Sole Trader (why would the charge you if you wanted to pay tax )

The preliminary tax thing is only a problem for one year..

You have to pay to register with the CRO as a sole trader €40 by paper, €20 if online.

Preliminary tax is an issue every year not just the first, you have to pay preliminary tax for the year ahead when paying you tax for that accounting year.

For the minute OP you wont be making big money so just look at it as pocket money as P says, as reagrds your employed its nothing to with them. If things took off you would be submitting seperate tax returns and would probably be taxed at the higher rate on your own earnings because your full time job would take most of your tax credit. Again if it got to this stage talk to an accountant.

p

Axwell wrote: »

You have to pay to register with the CRO as a sole trader €40 by paper, €20 if online.

True, but you only need to register withthe CRO if you want a trading name. You don't need that to be self-employed, you can just use your own name. I did that for 3 years, because I was using my own name for freelancing.

Preliminary tax is an issue every year not just the first, you have to pay preliminary tax for the year ahead when paying you tax for that accounting year.

True, but the cashflow issue is less of an issue after the first year, since you'd have to play it anyway.