benifits of being your own boss tax wise??

sc86

hi there, i am contemplating goin into business legitamitly but need opinions or even a link to something i can read...

if i start my own buisness can i get a vat number easily?
if i earn only a small wage what am i taxed on?
what can i claim back in petrol expenses etc?

i just want to see is it worth my while goin ahead with this

Plebs

sc86 wrote: »

hi there, i am contemplating goin into business legitamitly but need opinions or even a link to something i can read...

if i start my own buisness can i get a vat number easily?
if i earn only a small wage what am i taxed on?
what can i claim back in petrol expenses etc?

i just want to see is it worth my while goin ahead with this

As a rule of thumb, you need to be earning €100k a year to justify being self-employed. If you're not at that amount by year 3, you should seriously consider doing something else. The stress and compliance just ain't worth it otherwise.

Is it a product or a service you're planning on offering?

sc86

Plebs wrote: »

As a rule of thumb, you need to be earning €100k a year to justify being self-employed. If you're not at that amount by year 3, you should seriously consider doing something else. The stress and compliance just ain't worth it otherwise.

Is it a product or a service you're planning on offering?

offering a service in the motor trade, sellin cars/parts/recovery service
100k is alot in this day and age?? i dont mind the work or hours when its 4 myself and i get a buzz from it, id like to start building a business and see where it goes, i hate working for others and find it hard to motivate myself as i feal i could be doing the same thing for myself and making more money as any job i have had has being very poorly paid for the hours i do...

seco

The following link should answer most of your questions: http://www.revenue.ie/en/business/running/how-is-company-taxed.html
I would suggest that your key concerns before setting up your own business is that the busines idea is viable and you have sufficient capital at the outset. If you can cover these off and you are motivated enough, then go for it but be prepared to give it at least a year. Do not be worried about the books and records and tax registration and compliance. These are secondary matters and can be tailored to your needs.

tomED

Plebs wrote: »

As a rule of thumb, you need to be earning €100k a year to justify being self-employed. If you're not at that amount by year 3, you should seriously consider doing something else. The stress and compliance just ain't worth it otherwise.

Is it a product or a service you're planning on offering?

Would love to know where your "rule of thumb" comes from - I know plenty of companies who many on the outside would consider "successful companies" where the directors are still earning as little as €25k per annum well after 3 years in business.

I know others who would argue there is very little stress and more freedom working for yourself earning minimum wage, than work for someone else.

To OP - I've been in business myself for over 7 years, I have a massive gripe with how little help is given to small business start ups in terms of tax relief etc.

It's easy to register for VAT. Vat returns are simple to do and manage when volume is low.

You are taxed like any other PAYE, except you don't qualify for the PAYE tax credit. You pay less PRSI - although some see this as being attractive initially, I would actually prefer to be allowed to pay more PRSI and avail of the benefits that come with it.

With petrol you can claim on receipts or by mileage. I personally do the latter.

There are no real benefits tax-wise by being self employed other than the fact that anything you need to run your business (within reason) can be off-set against your annual tax bill.

It would be worthwhile talking to an accountant (if you know one) before getting set up - they'll be able to tell you exactly what you can claim for and the best way to set up your business.

RATM

tomED wrote: »

There are no real benefits tax-wise by being self employed other than the fact that anything you need to run your business (within reason) can be off-set against your annual tax bill.

.

Just wondering can you put this in context, like where do they draw the line on 'need to run your business'. Say for example my business has gotten broken in to- I spend thousands on CCTV to stop it occuring again. Can you claim that back against your tax? Or is it more so for things like stationery, ESB, etc?

tomED

RATM wrote: »

Just wondering can you put this in context, like where do they draw the line on 'need to run your business'. Say for example my business has gotten broken in to- I spend thousands on CCTV to stop it occuring again. Can you claim that back against your tax? Or is it more so for things like stationery, ESB, etc?

Yes installing a CCTV system would be an tax deductible expense.

For example, what I'm saying is, like me, I need suits for work, but I can't put them down as a tax deductible expense, even though I wouldn't bother wearing one outside work.

An accountant will be able to tell you much better than I ever could!

Tazz T

tomED wrote: »

To OP - I've been in business myself for over 7 years, I have a massive gripe with how little help is given to small business start ups in terms of tax relief etc.

It's easy to register for VAT. Vat returns are simple to do and manage when volume is low.

You are taxed like any other PAYE, except you don't qualify for the PAYE tax credit. You pay less PRSI - although some see this as being attractive initially, I would actually prefer to be allowed to pay more PRSI and avail of the benefits that come with it.

I too have am fed up to how little support given to start ups.

OP should know that there is no obligation to register for VAT if you earn less than 25,000. Don't think that's changed since last year.

The PRSI is my biggest problem with the whole system. Become self-employed and basically you lose your dole safety net if your business fails. So I'm at a loss to see why the self-employed pay PRSI at all. The other huge problem with this is that have a bad year (like me this year) and you can end up paying far more PRSI proportionally than a PAYE person. All self-employed pay a minimum of €250 PRSI, so effectively if you earn just €50, you pay PRSI of 500% - an extreme example but it happens.

There are no incentives for starting a business in this country whatsoever and now is when there should be to kickstart the economy.

sc86

i cant thank you guys enough for your help, i am goin to sit down with a accountant i think itl be money well spent, i was goin to fill out a tr1 form today but im gona wait till i talk to him..

a friend told me if your on the dole and start ur owns business you are able to recieve 180e ish a week in a grant from the government??

writhen

a friend told me if your on the dole and start ur owns business you are able to recieve 180e ish a week in a grant from the government??

It's called the Back to Work Enterprise Scheme. Enables you to keep your dole for 9 - 12 months. Contact your local County Enterprise Board and they will tell you who is administering it in your area.

sc86

writhen wrote: »

It's called the Back to Work Enterprise Scheme. Enables you to keep your dole for 9 - 12 months. Contact your local County Enterprise Board and they will tell you who is administering it in your area.

thanks mate

LevelSpirit

Plebs wrote: »

As a rule of thumb, you need to be earning €100k a year to justify being self-employed. If you're not at that amount by year 3, you should seriously consider doing something else. The stress and compliance just ain't worth it otherwise.

Is it a product or a service you're planning on offering?

I would agree completely with this.
By the time you are finished with accountants, keeping your own records, drumming up business etc you will be putting a hell of a lot of time and energy in.
Then you have the whole PRSI thing. If you dont get any work there is no help at all from the government. No dole, nothing.

No point doing 90 hours a week for buttons.

The amount of people I know wasting their lives for years on their own business is unreal. They are just breaking even or making a small profit over the year and they think this is ok. You sit down with them and do the sums and they are shocked. Great if thats the life you want.

Make sure you are going to be taking at least 100k, otherwise you'll be better off getting a normal job.

sc86

LevelSpirit wrote: »

I would agree completely with this.
By the time you are finished with accountants, keeping your own records, drumming up business etc you will be putting a hell of a lot of time and energy in.
Then you have the whole PRSI thing. If you dont get any work there is no help at all from the government. No dole, nothing.

No point doing 90 hours a week for buttons.

The amount of people I know wasting their lives for years on their own business is unreal. They are just breaking even or making a small profit over the year and they think this is ok. You sit down with them and do the sums and they are shocked. Great if thats the life you want.

Make sure you are going to be taking at least 100k, otherwise you'll be better off getting a normal job.

the problem is that i cant get a job at the minute, im sick of sending cv around, i have ambition and doing nothing wont get me there, working long hours wont bother me because at least il have a wage coming in and not at home fealing depressed and useless...

JonJoeDali

LevelSpirit wrote: »

I would agree completely with this.
By the time you are finished with accountants, keeping your own records, drumming up business etc you will be putting a hell of a lot of time and energy in.
Then you have the whole PRSI thing. If you dont get any work there is no help at all from the government. No dole, nothing.

No point doing 90 hours a week for buttons.

The amount of people I know wasting their lives for years on their own business is unreal. They are just breaking even or making a small profit over the year and they think this is ok. You sit down with them and do the sums and they are shocked. Great if thats the life you want.

Make sure you are going to be taking at least 100k, otherwise you'll be better off getting a normal job.

Don't forget pensions. I know guys who are 40/45 who've been hacking away over the years. Made a bit of money during the boom years, yes, but have no pensions and are struggling to get average industrial wage at the minute.

A 9 to 5, 25k a year pensionable job where you go home at 4 on a Friday is infinitely preferable to being a jack of all trades work horse too proud to know when to call it a day.

contentking

Tazz T wrote: »

OP should know that there is no obligation to register for VAT if you earn less than 25,000. Don't think that's changed since last year.

It's actually €37.5k for service oriented businesses and €75k for those who sell goods...

LevelSpirit

JonJoeDali wrote: »

Don't forget pensions. I know guys who are 40/45 who've been hacking away over the years. Made a bit of money during the boom years, yes, but have no pensions and are struggling to get average industrial wage at the minute.

A 9 to 5, 25k a year pensionable job where you go home at 4 on a Friday is infinitely preferable to being a jack of all trades work horse too proud to know when to call it a day.

You are right there. And medical insurance too. being self employed you are taking huge risks if you skip either of these.

BnB

On the comment RE making at least 100k to make it worthwhile...

This is very debatable

Yes, I would certainly agree, there are a lot of people out there who are just fooling themselves. Chasing their tails, 7 days a week. Turning over a good bit of money but often in reality spending the most of it on expenses and making sod all acual profit for themselves.

But there are a lot of people out there who have worked away for themselves for years and made a living without becoming millionaires. They have had a good standard of living not having to answer to anyone but themselves.

Also, I would advise anyone who was in a good secure job making decent money to have a good long think about giving it up to work for themselves. But I think someone in the OPs position is (unfortunatly) in an ideal position to go for it. He is out of work anyway so might as well give it a go. Worst case scenario that it doesn't work out, I think it'll be good on his CV and might help him get a job in the future.

sc86

BnB wrote: »

On the comment RE making at least 100k to make it worthwhile...

This is very debatable

Yes, I would certainly agree, there are a lot of people out there who are just fooling themselves. Chasing their tails, 7 days a week. Turning over a good bit of money but often in reality spending the most of it on expenses and making sod all acual profit for themselves.

But there are a lot of people out there who have worked away for themselves for years and made a living without becoming millionaires. They have had a good standard of living not having to answer to anyone but themselves.

Also, I would advise anyone who was in a good secure job making decent money to have a good long think about giving it up to work for themselves. But I think someone in the OPs position is (unfortunatly) in an ideal position to go for it. He is out of work anyway so might as well give it a go. Worst case scenario that it doesn't work out, I think it'll be good on his CV and might help him get a job in the future.

do you think even a failed business venture would look good on my cv?
my cv isnt to bad as it is and i still cant even get a interview, i am not even aiming to high...
i agree though i have nothing to loose only my pride:D

Cath.

hi there.

I have been put to the complicated situation lately. If anyone knows what is the best option for me I would be grateful.

I am receiving jobseekers allowance since 2 years. I have 8 month old baby and am single parent since few days. My boyfriend just left us.
I was going to go back to work as a self employed person but cannot do it full time as I am looking after my baby by myself.
I was considering to apply for one parent allowance and back to work enterprise all but I am afraid to lose my rent allowance. I dont think I will be able to earn more than 100€ a week and some weeks it may be nothing so I am not sure of my income. Can I be a part time self employeed and keep the rent allowance?

The other thing is my mother who needs full time care, and I have to take care of her since a few weeks. She is polish and she is sick. Since she has no one to look after her in Poland she had to come here and had a cancer treatment and surgery. How I will combine this with one parent and back to work.?
It is all to much for me I dont now what is the best option?

Do you have any ideas?

The Minstrel

Plebs wrote: »

As a rule of thumb, you need to be earning €100k a year to justify being self-employed. If you're not at that amount by year 3, you should seriously consider doing something else. The stress and compliance just ain't worth it otherwise.

Is it a product or a service you're planning on offering?

Is this guy serious? Rule of thumb my ass!

JonJoeDali

The Minstrel wrote: »

Is this guy serious? Rule of thumb my ass!

I'd tend to agree with plebs.

I'd much prefer a €25k a year permanent pensionable 9 to 5 than to be slogging it out for twice or three times that.

The nature of being self employed under €100k per annum is that you're not permanent. Anything can go wrong.

If you're earning €100k net and want to buy a gaff for €500k, you'd have to have about €200k saved up and you'll pay extra interest.

If you were earning €70k PAYE, you'd only need €50k to €100k saved up.

Then there are the health benefits of the 9 to 5 permanent pensionable. Which become very important once you hit your 40s. Even for non-smokers and non-drinkers. If the worst comes to the worst, you can always retire on a half pension. But how many sole traders and company directors have been putting that on the long finger? Quite a few I would say.