Avoiding Getting Screwed By The Taxman..Advice?

briansmurph

Hey guys and gals,

So i work in sales, commision only. The figure i get is €45 per sale. Thankfully i'm pretty damn good at the job, i'm only 6 weeks in, i have only received one pay check so far, only for a few days work so paid no tax.
I will be paid monthly, and i'm roughly going to make €4500 a month, pre tax.
How much tax will i be expected to pay, how do i avoid getting screwed?

I presume claiming lots of "expenses" is one way?

Help much appreciated!

briansmurph

Yeah but putting money into a pension, so i'm told, is suicidal?

Won't i lose it if the banks lose their arse?

DonJose

Top up your pension (PRSA) by as much as you can, thats the best way to keep your money out of the taxmans hands. On earnings of €60k you could put away €12k and save paying €5k in tax

http://www.citizensinformation.ie/categories/money-and-tax/personal-finance/pensions/personal_retirement_savings_accounts#rates

Sorry I just added something.

DonJose

briansmurph wrote: »

Yeah but putting money into a pension, so i'm told, is suicidal?

Won't i lose it if the banks lose their arse?

It all depends on where the PRSA is invested, thats why you should speak with a financial advisor.

jimmycrackcorm

Best time now to pay into a pension - the unit values can't go down much further than they are at the moment.

briansmurph

But to actually increase my take home pay each month, without having to invest it all in a pension, is there a way around it?

Thanks for the advice on pensions though must look into it.

3DataModem

briansmurph wrote: »

But to actually increase my take home pay each month, without having to invest it all in a pension, is there a way around it?

There are very few ways left for an employed person to reduce their tax liability with things like benefit-in-kind etc.

Best thing to do is ensure you are getting all the tax allowances you are entitled to (rent, MIRAS, married, carer, blind, etc).

As an employee there is little you can expense... you are looking at about 1300 per month in tax / PRSI / levies.

Regards,

3DM

briansmurph

I'll be claiming upwards of 5-600 euro a month on expenses, will that serve me well in lowering the approx 1300?

Thanks for all the help, its much appreciated!

Mrs OBumble

3DataModem wrote: »

As an employee there is little you can expense... you are looking at about 1300 per month in tax / PRSI / levies.

OP, can you clarify:

You say you're on "commission only" - that means you're self-employed surely, rather than an employee?

If so, then as you say "expenses" make a difference. I'd suggest taking to a tax accountant to make sure you claim everything you're entitled to, apparently there are some goodies left for the self-employed still.

NB In general, I believe in paying all the taxes that are due. Not a cent more, but not a cent less either. Tax is one area where being scrupulously honest and rat-cunning (to avail of tax-management opportunities) at the same time is a good thing.

The Blonde One

briansmurph wrote: »

I'll be claiming upwards of 5-600 euro a month on expenses, will that serve me well in lowering the approx 1300?

Thanks for all the help, its much appreciated!

You'll have to have a pretty convincing letter for Revenue to grant you that much expenses per month. I doubt it it'll be approved though.

Eoin

The Blonde One wrote:

You'll have to have a pretty convincing letter for Revenue to grant you that much expenses per month. I doubt it it'll be approved though.

What letter would the Revenue give you? If the OP is self employed, then does he not just declare his income after his "expenses"?

briansmurph wrote:

Avoiding Getting Screwed By The Taxman

As JustMary says, make sure you're claiming for everything you are entitled to.

The Blonde One

eoin wrote: »

What letter would the Revenue give you? If the OP is self employed, then does he not just declare his income after his "expenses"?



As JustMary says, make sure you're claiming for everything you are entitled to.

The o/p said he had paid no tax in his first payslip, so I assumed he was PAYE. A PAYE worker has to state a case for claiming expenses outside the normal flat rate expenses.

Eoin

What expenses would they typically be? My only experience is claiming expenses back directly from work (travel and so on) - I'm not 100% sure what we're talking about here.

The Blonde One

It would be outside the norm for a PAYE worker to claim a big amount of expenses. It's normally sales reps who use their own car and their employer doesn't reimburse then any/enough. It's not too frequent though as employees normally have an agreement in place with their employers.

Eoin

Anyone who travels abroad a good bit would claim a lot on expenses. Is this not just handled entirely by the accounts dept of the company?

The Blonde One

The only claim Revenue would normally get would be car expenses.....I have no idea what other expenses people claim from their own companies.

Eoin

Ah, think I get you.

The Blonde One

Cool!! I was worried there was crossed wires!!

Mrs OBumble

The Blonde One wrote: »

The o/p said he had paid no tax in his first payslip, so I assumed he was PAYE. A PAYE worker has to state a case for claiming expenses outside the normal flat rate expenses.

He said paycheck, rather than payslip.

And he said commission-only, E-45 per sale. This means he's not getting minimum wage, so I can't see how he can be an employee.

briansmurph

Sorry for the late response,

I'm "self employed", sales rep making commision only.
I "bill" my company €45 per sale which they pay me.
The expenses include diesel, food, maps, hotel stays etc.

It's my first experience in this kind of system to be honest, but the fact i'm doing very well is why im so worried as my "wages" will be large and i dont wanna get caught for a fortune in tax

the first "pay check" i was supposed to be an employee as such from then on, but its changed again and now i'm billing them for sales and pying my own tax, i dont know anything about paying tax myself as in my previous job i had my tax paid for me and just got a take home pay check.

Thanks to everyone for the responses, it's helping me get some grasp of whats involved

RangeR

briansmurph wrote: »

It's my first experience in this kind of system to be honest....

Get an accountant... NOW!!!

Mrs OBumble

RangeR wrote: »

Get an accountant... NOW!!!

+1000 to that

The self-employed option is good, but has some pitfalls.

As well as tax, you need to budget for your own training, holiday-pay, sick-pay. And you need to either take out income protection insurance (if that's possible), or save - because if the job falls apart you will not be eligible for Jobseekers Benefit (or Sick Benefit, or various others).

Also, you need to be aware of what public-liability or professional-indemnity insurance you need: there may not be any needed for a sales person, provided your car insurance is ok (you did tell the insurance company that you're now using the vehicle for self-employed work, didn't you ).

And you need to manage the cash-flow aspects of tax: sometime the 2nd year can be difficult if you have to pay the bill for the first year and provisional-tax for year-two at the same time (not sure if that's an issue here in ROI, it is in some places).

Good luck.