Sole Trader Queries

narac

Hi Guys

Please bear with me, I have a lot of questions about establishing myself as a sole trader. Some of my questions probably seem silly, but I suppose I just want to be sure about stuff.

So, I've just finished my postgrad, and have got some consultancy contract work for a local business, starting asap. We have agreed a monthly fee for my work.

My questions are:

1. Do I need to register as a sole trader? Or do I just need to file the tax returns at the end of the year?
2. I did a bit of construction work before, but I let someone else take care of the business end of it. Not really knowing what I was doing, I ended up with a massive tax bill at the end of the year. Now I want to know if I can calculate my tax on a monthly basis and prepay to the Revenue? This is so I don't end up with another huge tax bill!
3. What tax do I have to consider? Income tax and PRSI? And on the tax credits - I get personal tax credits but I don't get PAYE tax credit, right?
4. Do I need to VAT register? I understand that the cutoff is €37.5k for VAT, and if I have a turnover of more than that, I need to VAT register. For this year, though, I won't get over 37.5k (because there's only a few months left in the year) but next year I might. What are the advantages/disadvantages of VAT registering?
5. I have been asked to provide a quote for the next 4 months. What information do I need to put in a quote?
   1. My name and address
   2. Who I'm quoting (the local business)
   3. The service I'm providing
   4. Unit cost (monthly fee)
   5. Total
   6. VAT (if I vat register)
   7. Anything else?

Now, seeing as I have been a student for the past few years, we had it set up so that my wife got all my personal tax credits, including this year. Now, in September, she is returning to college to do a PhD. So, at the end of the year, are we better off to file a return together, and let the tax office sort out our taxes? I suppose, what I'm saying is that there is no way to change the fact that we are jointly assessed midway through the year, right? But if we file a return together at the end of the year, the tax office will return any taxes due to us?

Thanks for any advice and patience!

paddy26

narac wrote: »

Hi Guys

Please bear with me, I have a lot of questions about establishing myself as a sole trader. Some of my questions probably seem silly, but I suppose I just want to be sure about stuff.

So, I've just finished my postgrad, and have got some consultancy contract work for a local business, starting asap. We have agreed a monthly fee for my work.

My questions are:

1. Do I need to register as a sole trader? Or do I just need to file the tax returns at the end of the year?
2. I did a bit of construction work before, but I let someone else take care of the business end of it. Not really knowing what I was doing, I ended up with a massive tax bill at the end of the year. Now I want to know if I can calculate my tax on a monthly basis and prepay to the Revenue? This is so I don't end up with another huge tax bill!
3. What tax do I have to consider? Income tax and PRSI? And on the tax credits - I get personal tax credits but I don't get PAYE tax credit, right?
4. Do I need to VAT register? I understand that the cutoff is €37.5k for VAT, and if I have a turnover of more than that, I need to VAT register. For this year, though, I won't get over 37.5k (because there's only a few months left in the year) but next year I might. What are the advantages/disadvantages of VAT registering?
5. I have been asked to provide a quote for the next 4 months. What information do I need to put in a quote?
   1. My name and address
   2. Who I'm quoting (the local business)
   3. The service I'm providing
   4. Unit cost (monthly fee)
   5. Total
   6. VAT (if I vat register)
   7. Anything else?

Now, seeing as I have been a student for the past few years, we had it set up so that my wife got all my personal tax credits, including this year. Now, in September, she is returning to college to do a PhD. So, at the end of the year, are we better off to file a return together, and let the tax office sort out our taxes? I suppose, what I'm saying is that there is no way to change the fact that we are jointly assessed midway through the year, right? But if we file a return together at the end of the year, the tax office will return any taxes due to us?

Thanks for any advice and patience!

1. You should register as a sole trader with Revenue (TR1 form). You can also register for VAT if applicable at the same time.

2. You can fill in a form to pay by Direct Debit http://www.revenue.ie/en/business/running/remitting-tax.html#sec1

3. Correct. Lower PRSI as you are self employed

4. Probably dont register until you have to as I imagine you inputs will be low from a VAT perspective.

5. As far as I know there is nothing specific required in a quote. There are requirements for an invoice (VAT number etc). To keep things easy maybe include as much info as you can.

6. Probably easiest to clear it all up at year end with the tax return. You could complete this in early Jan and they would be back to you with a figure in six weeks approx.

The only thing to be careful of is whether the revenue consider you a contractor or employee. The company will need to advise on this.

narac

Hi Paddy,

Thanks for this. It's a great help.

Cheers