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Musician as sole trader

  • 02-12-2010 8:52pm
    #1
    Boldfish
    Closed Accounts Posts: 4 ✭


    Hi

    I, like many, am very confused and overwhelmed by all the complicated information out there on setting up a business. Hopefully somebody can give me some nice quick answers! Hopefully my questions are not tooooo stupid!

    I have a full time job but I also play live music. This is mostly for cash but sometimes the venue will ask for my PPS number before paying me. So my idea is setting up as a sole trader musician. Is this a good idea?

    Here are some questions. All VAT related:

    1. If I am a sole trader, can I claim back VAT on musical equipment bought?

    2. I already own lots of equipment, if I transfer that to business, can I claim that VAT back? i.e. sell my stuff to myself and claim back VAT.

    3. If I buy a van to carry my equipment, can I claim VAT back on the van?

    4. Assuming I buy all this stuff, my company will technically be making a loss because I spend more than I earn. Is that a problem?

    Thanks!
    Tagged:


Comments

  • #2
    Gloomtastic!
    Registered Users, Registered Users 2 Posts: 8,825 ✭✭✭Gloomtastic!


    You can't claim for VAT unless you are registered for VAT and if you are earning less than €37,500 from your music then it is probably not in your interest to do so. Otherwise you are giving 21% of your income to the tax man for nothing.

    As a sole trader, my accountant has told me, you can claim the full cost of the van (up to €23,000) against tax, not just the VAT.

    I believe there is a time limit on claiming back VAT on purchases. Buying/selling to yourself is pointless.

    If you make a loss because you have bought loads of kit then you don't pay tax. They'll get you next year though!!

    Best to check everything with an accountant but be warned they may charge you for this advice!


  • #3
    J.Ryan
    Registered Users, Registered Users 2 Posts: 474 ✭✭J.Ryan


    Boldfish wrote: »
    Hi

    I, like many, am very confused and overwhelmed by all the complicated information out there on setting up a business. Hopefully somebody can give me some nice quick answers! Hopefully my questions are not tooooo stupid!

    I have a full time job but I also play live music. This is mostly for cash but sometimes the venue will ask for my PPS number before paying me. So my idea is setting up as a sole trader musician. Is this a good idea?

    Here are some questions. All VAT related:

    1. If I am a sole trader, can I claim back VAT on musical equipment bought?

    2. I already own lots of equipment, if I transfer that to business, can I claim that VAT back? i.e. sell my stuff to myself and claim back VAT.

    3. If I buy a van to carry my equipment, can I claim VAT back on the van?

    4. Assuming I buy all this stuff, my company will technically be making a loss because I spend more than I earn. Is that a problem?

    Thanks!


    The fact that the venues have your PPS means that the Revenue may be aware of your self employed status, so you should register (officially) as soon as possible.

    VAT that depends on your customers, will they pay you the VAT (€121 instead of €100 or €242/€200 etc) if not and you earn under the threshold then forget about registering as it will only cost you money.

    Feel free to PM me if you wish (I'm an accountant based in Wicklow).


  • #4
    byrne0f56789
    Closed Accounts Posts: 201 ✭✭byrne0f56789


    File a tax return that includes your non-PAYE income. Remember the income from your music is supplemental.

    Remember the tax bands and that your PAYE income will be included when you are working out your tax band.

    Keep a record of your income and expenditure. You can only write off your equipment over a period of time. The revenue has guidelines on this.


  • #5
    Boldfish
    Closed Accounts Posts: 4 ✭Boldfish


    Thanks for the advice guys. I am slowly learning by reading up on all this.

    I'll forget about the VAT. But I would still like to buy a commercial van for carrying my gear. My private car just can't handle it. I'd like to buy a cheap van to lug my gear around when I have gigs. In order to tax a commercial vehicle I will need a registration number for a business so I think I still need to set up as a sole trader.

    I just need to know how to pay tax. I am already PAYE as an engineer. My income from playing music on the side is very very small but I assume I need to declare everything. I would like to keep the two separate though. My boss is very strange and would likely be a bit concerned if I suddenly decided I want to do all my own taxes.

    I have a friend who is training to be an accountant. I'll ask her. If she doesn't know, I might give you a shout for a bit of advice J. Ryan! I'm in Baltinglass.


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