Self employed (Freelance work)

Fiii

Hey guys

I lost my full time job back in June (damn recession ), but just got a phonecall from my previous employer saying that they have some work going, but it will be a freelance contract, and only until xmas (for now).
So basically, I work the same job as I used to, but then invoice them, and they pay me by cheque every week, so now I have to sort out my own taxes and PRSI payments etc etc.

I popped down to the Revenue office in Tallaght today to ask where I go from here, and was given the TR1 form to register myself as self employed and a wee booklet called "Starting in Business - A Revenue Guide".
Now I know this should be enough, but I am trying to wade through the booklet, and it's pretty confusing as it's mostly for someone setting up a business, rather than someone doing freelance work.

So I take it I fill out this form, and I will be registered for self assessment, but what happens after that?
I gather from going through the reading, that I don't actually pay the tax I owe on this year, until October 2010, is that right? And if that is right, do I pay what I owe for working this Sept and Oct in 2010, and what I work this Nov and Dec in 2011?
So how do I calculate how much I should put away from each pay cheque until then?
And will this payment include PRSI contributions?

Sorry if these are stupid questions - life was just so much easier when the money was just taken from my pay each month and it was all sorted!

TaxingTimes

You will need to produce income and expenditure accounts either up to 31 December 2009, or a year end that suits you.

You will be taxable in 2009 on your profits from now to 31 December 2009, and this is what will go on your 2009 tax return which is due for filing by 31 October 2010.

You will have your tax credits available for the remainder of the year to set against the tax liability.

Depending on the level of your profits you may be taxed at 20% or higher rate tax.

You will also have to pay PRSI and levies at that time (31 October 2010), and Preliminary tax for the following year.

I would suggest that you get advice on this, to have an idea of what to put away for th bill.


For a reasonable level of profit - going into higher rate tax, I would suggest you put away 30% of your turnover.

You also need to consider VAT registration and other matters.

Gruver

I am in a similar position except I am only working 2-3 days per week (most weeks). I have been claiming unemployment benefit since I lost my job. I am continuing to claim as the work that I am doing is entirely unpredictable so I still consider myself to be unemployed. I will declare all of the income (freelance and unemployment benefit). I'm not entirely sure what I should do in relation to the unemoloyment benefit. Should I continue to claim until I get a more permanent position and repay it in my 2010 tax return or should I do something else?

TaxingTimes

Unemployment benefit entitlement has nothing to do with tax (other than being taxable income).

You will need to confirm your entitlement with Social Welfare.

anamaria

If the work is unpredicable you can use the casual dockets the social welfare office can give you. Basicall you fill out whether you have worked any days that week and if it is less than three then you get social welfare payment for the other day. It's fairly simple, put an 'X' under the days you work and hand the dockets in.
You do need to tell them if you work a couple of days though because if you don't then you are getting unemployment payment for days you are actually working

prettygurrly

i know this is an old thread but...

trying to work out my bfs income based on his pay for 3 day week and his casual docket. presently he's not paying any tax on his unemployment benefit, but you mentioned unemployment benefit is a taxable income so what made you say that?

namenotavailablE

...presently he's not paying any tax on his unemployment benefit, but you mentioned unemployment benefit is a taxable income...

See this document- it is NOT taxable if he's on a 'short-time working arrangement', as is the case. A portion of it is taxable if he wasn't working at all.

BTW- Not sure, but I suspect the moderator would prefer if you have a query that you open a new thread rather than resurrect an old one :-)

prettygurrly

yes agreed. just that the people in this thread who made a statement wouldn't be notified of a new thread so hence why i opened up an old one. if mod wants to delete it then i'm ok with that.

thanks for the reply and for clearing it up for me "namenotavailable"