Advisory role

Shannonsider

Hi folks, a mate of mine has asked me to come on board in a new business venture but the role will be solely 'business advisory' or 'non-executive director'.

I've a full time job and am wondering how I should do this from a salary/tax point of view. Take on a role as 'business advisor' (I'm not registered as any sort of company/ltd co/sole trader so I'm not sure what implications there are from a tax point of view)

or a

Non Exec Director (which I'm guessing means greater liability from my point of view, greater compliance and again I'm not sure what implications this has in terms of salary/tax etc)

Any help or advice would be hugely appreciated

shoutman

I'm not sure if it applies to non-exec directors too but I know that directors in general can be made liable for the business if things are mismanaged, even if you have zero knowledge of the day to day runnings of the business. etc. So unless you are going to know exactly what is going on I'd stay clear of this.
But once again i'm not 100% on this.

Axwell

As far as I know when it comes to the tax year you can submit your own tax form and fill in the additional income section which would be any additional income received in addition to your normal PAYE earnings which are dealt with by your employer. This would be if you went down the advisor role and acted like a consultant to them as oppose to a director/employee

Im am not an accountant or tax adviser so maybe someone can give you more accurate advice but have a look on www.revenue.ie and im sure you will find some info.

Shannonsider

Thanks for your comments.

My aim would be to go down the advisory role as I know as a director of any sort I would have certain obligations as to how the business operates and performs.

Ideally I'd like to be able to act as an advisor and receive a quarterly fee plus a profit-share. As you mentioned Axwell I'm guessing I could just declare this on some Revenue form.

Say I were to ask for €500 a quarter, is there an onus on me to register for vat or create an invoice? Or can I just declare it at the end of the year in a form to Revenue?

TheCostumeShop.ie: Ronan

Your nowhere near the vat threshold at 500 per quarter, just file at the end of the year. Maybe have the businesses accountant glance over what you intend to file. Obviously you can claim your business expenses (millage, subsistence etc) on top of your "advisory fee". Just invoice the business when your taking payment.

byrne0f56789

What about doing consulting and invoicing your friend for your work. Simple and straight forward. This whole non-exec business is a load of hot air in my opinion. It may in fact discourage investors if they don't like the advisory board.

Besides, I think that any entrepreneur who pays his/her advisory board in cash and not equity needs their head examined.

TheCostumeShop.ie: Ronan

byrne0f56789 wrote: »

Besides, I think that any entrepreneur who pays his/her advisory board in cash and not equity needs their head examined.

Byrne your on fire today, you must hand out equity like .com's in the late 90's

Shannonsider

Thanks for the advice folks. So if I'm doing an invoice (as a non-registered for ANYTHING except PAYE) is there anything in particular I need to include, exclude apart from my name, description of service and amount?

DoMyBooks

If you use one an excel template Like this it will give you a guide. An invoice should always contain an invoice number.

Keep track of any expenses which wholly and exclusively relate to this contract to assist when calculating your taxable profit.

Mod Note: <snip> Pernickity rules mean no advertising in posts, feel free to put it in your sig though.

Shannonsider

Thanks for the template.

One query - possibly in the wrong section - if I am not a registered company nor registered for taxation purposes (apart from as a PAYE employee) how do I calculate my taxable profit from my advisory services?

Say, I invoice for €1k per annum, and incurr €200 in expenses, do I pay tax at 12.5% on the €800 profit or is the €800k taxed as income tax (i.e. at the higher rate as I am over the standard tax band threshold)

DoMyBooks

You will pay tax at the higher rate. Don't forget the €200 is tax allowable expenses.

The 12.5% is the corporation tax rate.

You basically have two choices spend some time on the revenue website and learn about sole traders or pay an accountant. A simple sole trader computation like yours should cost less than €500 (thats country prices not Dublin)