Setting up as a Sole Trader

friendface

This is my first post in this forum so bear with me I'm looking for a bit of advice on setting up a business. I've read through some previous threads and Stickies on starting up a business but I suppose I still have a few basic questions.

Basically, I'm wondering whether it would be feasible to set up as a sole trader as an aside. I am already studying full time but would be interested in trying my hand at managing a small business part-time as a means of earning some extra cash (maybe) and mainly to gain experience in business management, accounting and handling business relationships.

Just to give you a bit of background about myself. I'm a PhD student, early 20's and have always had an interest in business. I've imported goods and sold them on a small scale in the past but never really put much money into the venture and had a few problems which put me off. However, I've always been very keen on working for myself and now that I have some time on my hands and don't have exams to worry about I think it might be a good time to try my hand at it.

I suppose my first question is in relation to the costs associated with setting up as a sole trader. As I said, I wouldn't expect to be earning much of an income from this and would certainly be under the VAT registration threshold. However, is it necessary to register a VAT number in order to reclaim VAT on purchases (I had planned on importing from the US and China). However, if I register for VAT does this mean I will need to file VAT returns every two months regardless of purchases/sales volumes. Also, is this a complicated procedure? Would it be possible to manage it myself online?

Is there any other costs associated with operating as a sole trader that I would need to consider? Also, would this affect welfare payments? I am currently receiving a county council grant to support my studies and am wondering whether being self-employed would mean I'll be assessed differently?

Is it mad to set up as a sole trader if I'm not doing it full-time? Sorry if I'm rambling here. Thanks for reading my post and I really appreciate any advice ye can give. Thanks!

Sonnenblumen

Small scale sole trader operation should not involve a huge amount of admin. Ater you've done the hard bit, makig the1 decision, th1e rest is straightforward.

Bi-monthly VAT returns are a doddle, especially if you have a low level of transactions (purchases and sales). Sole traders must also complete an annual PAYE return, again straightforward. I suspect you will encounter more admin with importing from China than local business admin.

You must register for VAT in order to import VAT fee (Europe), goods from China incur other chaRGES ETC.

In relation to your grant, I suppose as these are awarded after means testing etc, any change ie + change will probably impact negatively.

As a PhD just apply yourelf and do not become overly concerned with some routine admin matters.

Good luck

MOH

If you want to reclaim VAT on purchases you'd need to register for VAT - but I think if purchasing from outside the EU you'll need to pay VAT at the Irish rate on import.
On the other hand, not VAT registered means you won't be charging VAT and passing it on to Revenue, so you'll keep your full selling price.

For goods from outside the EU, you may also be liable for import duty, depending on the type of goods. Have a look at the TARIC database to check this. It's a bit finnicky about search terms, you might have to try a few synonyms to find what you want.

If you're talking about importing stuff from China, there's a few good posts on this forum about sourcing and transporting stuff, mickk and RUDOLF289 are two posters that spring to mind.

Might be worth a post on the State Benefits forum to check about the grant

friendface

Thank you for your replies. I'll have another read through some of the previous threads on Importing goods. I'll have to do some more research on VAT I think. Not sure if it would be worth my while in registering. One thing I noticed is that exports are exempt from VAT. Does this mean that a business can import goods, claim back VAT and then sell them outside of Ireland VAT free or does it have to be goods manufactured in Ireland which qualify for VAT-free export status.

Also, I found some useful information that RUDOLF289 posted up on a thread about 3 months ago:

Thanks again for the advice