Working and being a sole trader

dionsiseire

Hey i'm looking for some advice on the correct steps to be taking here.

I am currently employed full time as a PAYE worker, earning enough to pay tax etc etc.

I have just registered my website as a Business Name, and i believe the next step i need to take is fill out a TR1 form on Revenue.ie

If i do that, then the only income with be advertising from one source paid monthly and the only outgoings are years when domain / hosting is renewed.

Do i literally just keep tabs of everything during the year and submit anything earned to that point to revenue each year. I want to keep it simple, but above board.

I assume every penny earned via the website is taxed at 21% up to the threshold at 36,400 (i think thats the threshold) then 40% after that. If i get that high. All my tax credits being used by my PAYE job.

Am i correct in saying after the TR1 form its just keeping the receipts of revenue incoming and any of the small website related expenses i have and submitted to revenue once a year and paying the related bill once a year. Is that enough?

Cheers

Eoin

If you don't have to charge VAT then I think that's probably about right.

dionsiseire

Yeah literally it income from advertising, i'm not particularly selling anything and VAT would only be is turnover exceeded €3X,XXX

I assume that this coming October, having ignore my initialy site setup costs paid back in january (business name registered yesterday) that i don't have to submit accounts before October 31st for Zero income and Zero expenditure, as advertising income shouldnt be recieved till after then as far as i can tell

Eoin

I don't know if you have to file zero income, or if you can just do nothing at all. I'm sure someone else here with a lot more knowledge in this area will be able to tell you.

dionsiseire

Thanks eoin, im just filling in the TR1 form

I assume date to which these accounts will be made up is just a date without the year like 31st August in time for annual submission in October???

And i do fill in Part B (Registration for Income Tax) and specify other and how the site is generating funds.

Most of this TR1 form i'm leaving blank, Nothing in Trusts/Partnerships (as im sole trader), Nothing in Advisor/Accountant details as i'm hoping to do simple returns annually, Not registering for VAT, Not registering as a principal contractor, nor an employer for PAYE/PRSI as it will just be sole trade in my free time after normal PAYE work.

helenaoneill

Hi.
On the TR1 form your trading year should match the tax year, keeps life much easier! So your start date is today (for example) and your end of year will be December 31st.

Tax is worked out in arrears so the tax return deadline of 31 October 2010 relates to money earned in 2009. If you're just registering as self-employed now, you won't have to do a tax return until next year for this year's work/earnings. ie your first tax return deadline will be 31 October 2011.

On the tax return form (the Form 11) you will declare all income and expenses from self-employment and there is a section where you declare your employment earnings. Revenue will look at your whole situation and then look at your tax credits to determine how much tax you'll owe on the self-employment part. The most important thing you can do after registering is keep your receipts so that you can prove what you've earned and spent. You can probably claim more expenses then you realise and it's money well spent to book time with an accountant to go through this.

Good luck.

dionsiseire

Cheers Helena

So what your saying is that Accounts would be from Now to December 31st 2010 all income and expenditure during that time and they must be submitted by October 31st 2011.

So i assume that should my accounts be so simple to fill out and return that i could in theory submit them in January / February and pay the related Tax bill and then not worry about my accounts again for another year??

I realise booktime with an accountant will be useful, i may once i have some funds together use one to get the general gist of everything but if accounts need to be submitted once a year can i literally only get them involved for a few hours to complete my books and get them submitted sometime in 2011. Obviously a consult with them now would be good before i get started, i expect no income or expenditure from advertising to physically come in the door till around October. so i can forsee that literally my books this year for the website will be

October income xxx November income xxx December income xxx and i doubt there will be any expenses of hosting and domains till january. I realise i can probably claim expenses off items to work the site like laptops and printer/fax that i probably will need in time to complete my work effectively but literally the expenses will be few and far between, income should be through 1 to maybe 3 streams at most when it properly gets going and come in monthly. I imagine these are as basic as accounts can get

helenaoneill

Hi Again

Yes and yes to your first two questions. The forms usually become available between February and April each year and if you send it back before August 31 each year Revenue will put together a tax bill for you (known as a Notice of Assessment) and then you have until October 31 to pay it. It means if you get the form in early and owe any tax you have time to get it together. Even if you've made a loss or not earned any money the form must still go back in to Revenue so they know. Once you're registered as self employed it's useful to register with their Revenue Online Service (ROS) - this takes a couple of weeks to go through their steps but then you can do all of your returns online and with any income tax due you get 2-3 weeks extra to get it in to them (ie to the middle of November).

With allowable expenses, a good rule of thumb is if you're purchasing anything because you're self-employed then keep the receipt. If you're not sure keep any cash receipts (because you can't get these again) and a good bookkeeper or accountant will sort them out for you. If you're keeping receipts the books can be done, and these combined are used for your tax return so receipts are the place to start.

As a sole trader anyone can do your tax returns. Most people I know source a good bookkeeper with experience of annual returns - it works out about a third of the price of an accountant. If you don't know anyone approach your local Enterprise Board or Partnership Company, they usually have a number of people they could recommend.

Take care. Helena

Eoin

You might also be able to offset a portion of your domestic bills if your registered business address is your home address and the bills are in your name.

dionsiseire

Fantastic Advice Helena cheers, will probably try find a good cheap enough book keeper so for books and advice. Income wont be huge so i dont wanna spend the income on an accountant, there wont be many purchases or expenses, it really will be that simple

Cheers Eoin, realise that might be possible, but really this is just extra income i want to keep legitimate

Eoin

It's still legit. If you're doing some work from home, then a portion of your utility bills are business expenses. That's what my accountant said, and I'm in a similar position as you.

dionsiseire

most are not in my name are in the names of other residents, i just contribute.

Can anyone suggest an accountant / book keeper they use that would be worth consulting with that won't cost me arm and leg, literally would be looking for initial advice, ask the questions, find out exactly what the expect/need to do my books, and get rough cost of once a year accounts

helenaoneill

What part of the country are you in?

dionsiseire

Dublinia

helenaoneill

Around Dublin a good bookkeeper costs approx €20 p/hr. End of year returns tend to average €250-500 depending on the level of activity of the business. When you meet with one ask them to show you how to lay out a simple system so that you can keep the books yourself. With what you've described it should be quite easy and not take too much time to keep up to date.

dionsiseire

€250 - €500 could be managable and the cost will be an expense so won't pay tax on it so not the worst idea.

Definitely think with even an hours help i can lay out the accounts and literally would only need them checked before submission

Zonua

Hey - if you need help with accounts etc, well a lot of the Enterprise Boards and organisations do free/cheap courses and seminars with this kind of stuff.

Not sure where you're located, but you can check out
www.bap.ie
and
http://www.actioncommunityenterprise.ie/
(I know they have a tax course starting in August)

helenaoneill

Hi there, I can recommend a couple of excellent (and reasonable) bookkeepers in the Dun Laoghaire Rathdown area, if you'd like their details just let me know.

If not, if you let me know if you're Dublin Central/West/North etc I can pass on a couple of places who should be able to give you a recommended list!

Eoin

I use this place in Bray, they're good to deal with. Ignore the horrible website.
http://www.payrollireland.ie/

mari2222

Please think of doing a Start Your Own Business course offered by a County Enterprise Board: see www.enterpriseboards.ie for your local one.

This will save you lots of headaches. You will have to combine your sole trader income from the website with your gross income as an employee, then deduct expenses, then calculate tax.

You can do all this yourself, but you need to learn how to do it properly.

Once you get the info, you will be clearer on the steps to take.

The training will be cheap - subsidised by government funds.

good LucK!