Starting business: Simple questions with not so simple answers - or so it seems.

antog86

Ok guys, some of these may sound stupid, but like everything, when you dont know the answer they can be difficult. So here goes:

I have imported a product that i wish to sell to retailers here in ireland. Its a once off at present but may grow and become a annual thing. However, i am a PAYE worker, so im sure this will influence other things.

I will make somewhere between 3-6k profit on the goods. I will need to register for Vat as i will be selling to registered retailers, correct?

Do i need a company or can i just be a sole trader and still be registered for Vat?

How do i register a company/sole trader?

Will i need to make an additional tax return?

Anything else i am missing in order to be able to sell this item to retailers and be tax complient etc?

Also, should i tell my current employer (non conflicting business).

Any help will be greatly appreciated,

DubTony

A bit stuck for time so nice short answers.

antog86 wrote: »

Ok guys, some of these may sound stupid, but like everything, when you dont know the answer they can be difficult. So here goes:

I have imported a product that i wish to sell to retailers here in ireland. Its a once off at present but may grow and become a annual thing. However, i am a PAYE worker, so im sure this will influence other things.

I will make somewhere between 3-6k profit on the goods. I will need to register for Vat as i will be selling to registered retailers, correct?
That's probablythe best option but not necessary until you turnover 35K a year


Do i need a company or can i just be a sole trader and still be registered for Vat?

Either is fine


How do i register a company/sole trader?
CRO.ie


Will i need to make an additional tax return?
Yes


Anything else i am missing in order to be able to sell this item to retailers and be tax complient etc?
Don't think so


Also, should i tell my current employer (non conflicting business).
eeeh ... I'd keep it quiet for now, unless there's something in your contract

Any help will be greatly appreciated,

mickbyrne

Antog86

You don’t need to register for VAT until you reach the registration threshold. For you the threshold would probably by sales of €75,000 as you appear to be supplying goods. The €37,500 threshold is for the supply of services.

As the viability of the business is not yet certain I would probably start off as a sole trader. You can register as a company further down the line if you like. You can be VAT registered either way.

To register a company, you can it done through company formation agents that can be found online, your solicitor or your accountant. I would recommend using an accountant as they will normally also look after your tax registrations at the same time.

Whether you register as a sole trader or company, you will need to submit a personal income tax return (Form 11) each year.

You don’t need to tell your current employer, but if there is no conflict and both of you have a good professional relationship there shouldn't be a problem. Depends on the type of person they are. Most employers have done what you are doing now, and should be in a good position to give you sound advice.

Regards,

Michael

www.perspective.ie

random.stranger

As DubTony & MickByrne have touched on-
You don't need to register to VAT as long as your turnover stays below revenue's threshold. But, as you intend dealing Business to Business, your customers would probably prefer that you are VAT registered.

antog86

Ok so lets say i approach a retailer with my products for €20 and he agrees to buy at €20. Then do i charge him tax on top of this and pay it to the taxman or what. Sorry now if this sounds stupid

Will the retailers not ask me for a VAT invoice?

mcaul

antog86 wrote: »

Ok so lets say i approach a retailer with my products for €20 and he agrees to buy at €20. Then do i charge him tax on top of this and pay it to the taxman or what. Sorry now if this sounds stupid

Will the retailers not ask me for a VAT invoice?

You will always quote the retailer a price excluding vat. If you're registered for vat you add this on and the retailer reclaims it from revenue.

Another problem you may find is a lot of retailers won't want to take on a suppliers for a single product unless that product is exceptional. There also may be other product similar availble from various wholesalers etc.

If you wish, you can pm me with brief details & I can give you an appraisal of the product or the product marjket you are targeting.

DubTony

antog86 wrote: »

Ok so lets say i approach a retailer with my products for €20 and he agrees to buy at €20. Then do i charge him tax on top of this and pay it to the taxman or what. Sorry now if this sounds stupid

Will the retailers not ask me for a VAT invoice?

Yes, you add the VAT and as mccaul said, you always quote excluding vat. Don't make the mistake of approaching a retailer and being unsure of anything.

If you decide not to register for vat, when you quote a price to the retailer let him know that there's no vat as you're not registered, but what the appropriate vat rate is and a suggested selling price. That price will include vat as the retailer is registered and his margin will be the rest

€20 + 50% mark-up = €30 + 21.5% vat + SRP of €36.45

Also don't make the mistake of telling a retailer what the selling price should be. Always suggest a retail price. It's his shop. He'll sell it for whatever price he likes, and some of us get a bit pee'd off when we're "told" what price to sell something at.

If you are registered for vat you sell the goods at €20 and add vat on a separate line on the invoice. He'll reclaim this anyway, but you have to pay that portion to the tax man; that is, of course, less any vat you've paid to suppliers for goods and services.

Check here for info.

And here's a link to a pdf on their site . Guide to vat 2008

antog86

Excellent guys. Thanks to all