Final Payment

Sean^DCT4

Hi all,

I have recently completed some web site updates to an e-commerce site. The client has signed off on the UAT and has < 2000.00 outstanding to be paid off.

A friend of mine was trying to tell me that this amount is taxable @ 13.5% (for services). I always assumed the rate for development was 21.5% i.e. current VAT%.

@Moderators:
I know this is not a development question. Move if needed.


Thanks in advance,
Seán

NeverSayDie

The Revenue have a pretty good website with lots of info on this sort of thing, you should be able to find answers there. Situation in general would be that most things are charged at the regular VAT rate, with some special cases attracting the reduced rate (or a zero rate for some foods, medicines and such, or a special lower rate for certain farming-related stuff).

See here for a very extensive list of VAT rates applying to different products and services;
http://www.revenue.ie/en/tax/vat/rates/index.jsp

Rulmeq

If it's business-to-business why would it matter either way?

Sean^DCT4

This work was done as a nixer.

E39MSport

Have you got a VAT number?

Evil Phil

If you're working as a sole-trader then you don't have to charge VAT if your sales are below €35k, although that may have changed in the recent budget. Above that and you have to register for VAT. Limited companies have to be registered for VAT.

The rate is 21.5%, this will reduce to 21% in January 2010.

Rulmeq

Evil Phil wrote: »

If you're working as a sole-trader then you don't have to charge VAT if your sales are below €35k, although that may have changed in the recent budget. Above that and you have to register for VAT. Limited companies have to be registered for VAT.

The rate is 21.5%, this will reduce to 21% in January 2010.

€70k for the higher VAT rate. I get the feeling that this guy is trying to charge "VAT" on work that he did on the black market.

Sean^DCT4

Thanks for the replies.

Here is a bit of background.. I have been working in a full-time position as a developer for the last few years. I registered myself as a sole-trader with the CRO at the start of the year (mainly to get a .ie domain). I have not done any billable work up until this latest bit of work.

Excuse my naivety but do I have to complete annual tax returns/declarations as a sole-trader? I'm guessing that since my sales are below €35000 that I don't have to charge VAT but I do have to complete some kind of annual return?

NeverSayDie

Sean^DCT4 wrote: »

Thanks for the replies.

Here is a bit of background.. I have been working in a full-time position as a developer for the last few years. I registered myself as a sole-trader with the CRO at the start of the year (mainly to get a .ie domain). I have not done any billable work up until this latest bit of work.

Excuse my naivety but do I have to complete annual tax returns/declarations as a sole-trader? I'm guessing that since my sales are below €35000 that I don't have to charge VAT but I do have to complete some kind of annual return?

You most likely do if you have any income from the self-employment, and there can be consequences if you don't make those returns or if you go about it incorrectly or dishonestly. In a regular employed position, your employer will handle most tax stuff for you, including paying your tax. If you're self-employed, you need to take care of this yourself, or pay someone to do it for you.

See here for a starting off point, and there's lots more info and general advice around their site;
http://www.revenue.ie/en/business/self-assessment.html

If in doubt, you can talk to an accountant or tax professional re the paperwork, legalities and details. Speaking purely from personal experience and opinion, it's not too bad for small stuff once you go through it one step at a time. In my experience, the Revenue are generally a decent bunch who are quite willing to help you through the process - they want you to do it right at the end of they day, makes things easier for everyone if they don't have to come after you.

Rulmeq

Sean^DCT4 wrote: »

Thanks for the replies.

Excuse my naivety but do I have to complete annual tax returns/declarations as a sole-trader? I'm guessing that since my sales are below €35000 that I don't have to charge VAT but I do have to complete some kind of annual return?

Then the answer to your original question is simple, you don't charge VAT, you're not registered for it, you can't charge it, and you can't claim it back.

However the limit of 35k (for 13.5% VAT work), and 70k (for 21% work) only applies to registering for VAT.

If you have income from your sole trade you need to declare it on your form11 (which is where the accountant comes in).

The good news is that you can offset any expenses involved against this income (again a good accountant will advise you)