Accounts - Taxation for a small part time business

ditpaintball

Just a quick question for you wonderful people here, I am confused as to the best way to go about doing this. I have a few questions that if some one can answer / advise on, that would be great.

I have an opportunity to make an extra income from a internet based hobby. It will turn over less than 2K a year in advertising and merchandising. It will have some costs involved in running it - server, domains, licenses etc. Costs will be about 50% of turn over, the rest is all profit or inward investment.

• Should I set up a business and get paid through the business
• OR should I just stay away from a business, get cheques made out to me, lodge them in to my bank account and say more more?
• If the company gets paid for my product / service, do I then have to sign up for PAYE under that company to get payed etc? Will the company also have to pay tax on any profits
• Should I just not be an employee
• If I set up a business, can I get my mobile phone and fuel costs paid through it.
• Will I have to register for VAT
• Will I have to pay for an accounted to file accounts at the end of the year

Thanks for your time


Ninja edit....
Can a person be registered for PAYE while being a sold trader, say work 9-5 during the week but have the part time business at the weekend?

Legend100

well for the sake of a 2k turnover i def wdn't go to the trouble setting up a company as the admin of it would prob leave very money left when all things are set up and paid

By going as a sole trader you would pay tax on the profits of the business. You are not an employee which means what you take from the business is not taxable it is the actual income less expenses that is taxable.

You would be well under the threshold for vat so no need to register

i think there is a provision for PAYE workers who set up a business with a very low turnover (as in your case) that means you dont have to register for income tax and can just file a form 12 declaring your profit and pay tax on it then. this brings the benefit of not having to pay prelim tax

Again i wouldn't think you would need an accountant for a 2k turnover, just keep track of business expenses and take them off your income to get your profit and put this on form 12. Revenue will do the rest

ditpaintball

Cheers for that.

Say I went down the sole trader route,

Does it get messy if you are a sole trader and a PAYE worker also?

Legend100

No its very easy.

you can ring revenue to restrict your credits if you wish so as to apportion them from your paye credit to the sole trade but since its only a 2k turnover, i wouldnt bother.

If you keep all your cut off and credits with your paye income, you'll just pay tax on the profits once a year when you file the form 12. with a 2k turnover and assuming a 50% profit, you'll be taxed on the 1k profit at your marginal rate plus income levy and prsi. it won't be that much with max of around 480 euro if you are at the higher rate

ditpaintball

Thanks for the info, it clears up a lot.