Start a small company (and VAT number??)

techguy

Hi There,

I've just been offered some work by somebody and it turns out that I need to be a registered company to do the work.

I've heard before that you can register a company for very little (< €100). Is this true?

Also, what about VAT? If you are reg'd for VAT do you need to make a VAT return every year and does it complicate things considerably?

With regards all of this, what level of accounting needs to be done? For a simple company with VAT aside is it just a matter of trading profit and loss, balance sheet etc and then just keep record of all transactions etc?

Thanks in advance for any advice!!

seamus

You can register a business name with the CRO:
http://www.cro.ie/en/business-registration-business-name.aspx

The name can be anything (even your own name).

You don't have to register for VAT unless your turnover has/will exceed €37,500 for the year. And yes, registering for VAT means you have to do VAT returns and makes everything messy. If you're not VAT registered though, remember that you do not charge VAT on your services, you must pay VAT on all your business purchases and if charging expenses, always include the VAT in the cost (though don't list it as VAT).

Yes, do your accounting, but be aware that you're liable for income tax on all earnings under this business name. You don't do a separate Tax return for the company - you complete a self-assessment form at the end of the year and declare all earnings, whether earned under this business name or just as yourself (including PAYE). So if you're in the higher tax bracket, hold back at least 41% of all earnings in order to pay the tax man at the end of the year.

In order to be taxed differently, you would need to register a Ltd company and list yourself as an unpaid director. So the company pays tax on the profits, you don't. However, this requires an annual return to be completed and signed off each year, so unless you're pulling in €50k+ I wouldn't go this route.

techguy

Cool, thanks for that.

Basically. I'll be doing work for somebody who will be eligible for a grant. The grant requires that a business/company carry out work.

Would registering a business "<my_name> IT services" suffice?

mickbyrne

The registration mentioned by Seamus above is the incorrect registration if I read your original post correctly. You mention that you have to register a company where as seamus speaks of business name registration. To complete separate things, but looked after by the CRO.

Registration of a company is now very competitive, but unless you are going to everything yourself which I would advise against there is no way you would get it done for 100. There are a number of formation agents around dublin which can look after the paper work for you.

Following this you will need to register for taxes, with a company this will be Corportation Tax, PAYE-emp, and VAT if your turnover exceeds either 37.5k 75k depending on which treshold applies to your business.

For small companies the records can be quite simple, however if you set up a company this is a legal entity for which you are responsible. As well as tax returns, VAT returns, PAYE returns there are also Companies office returns which need to be filed annualy. I would advise speaking to an accountant.

Regards,
Michael
www.perspective.ie

seamus

As mickbyrne says, a business name may not suffice, maybe doublecheck it with the company, exactly what kind of body they need you to register. I've done business on a state-funded/grant-funded project just using a business name before, but different companies, different rules.

A registered company requires a little more paperwork, but if you're not earning that much, it's usually just a case of remember to file a zero return on your PAYE-emp, for example.

antoinolachtnai

If they are getting a grant they *might* require you to have a tax clearance certificate. This is completely different from registering as above, although not necessarily all that complex.

Register a business name by all means, but probably best not to get involved with registering a company for the sake of this.

There is nothing per se wrong with being a sole trader. It does have its issues, but it is probably right for you, from what I have heard.

You need to find out exactly what is required for the work. Maybe they just want to see some letterhead?

Best of luck with it.

techguy

Thanks for the replies guys.

Sorry if I was wrong in my original post. I would say that a business name would suffice. It's only for a county enterprise board.

I will be providing services to a local business and I will just need proof that I am a business and not some random guy claiming to be providing a service so the business can get the grant.

So as I understand it, I can register a business pretty cheaply and I only need to file a self assessment tax form. No VAT before €37,500 etc.

On the CRO website this can be done very cheaply. Is the form very complicated?

tombull82

techguy wrote: »

Thanks for the replies guys.

No VAT before €37,500 etc.

On the CRO website this can be done very cheaply. Is the form very complicated?

Probably still better off registering for VAT anyway as its B2B services you are offering.

The CRO form is very easy to fill out.

Bets of luck:)