New sole trader question - Expenses and income tax??

LJL

Hi,

I'm looking for information on income tax and expenses. I've looked through boards and cant find what I'm looking for.

I'm currently PAYE 3 days a week and I am setting up a small business in my spare time. I'm not registering for VAT as I dont think I will hit the threshold.

My first question is can I claim expenses if I am a soletrader. I will be making a good few sales calls around the country. Can I claim petrol? And what else can I claim as I will be based from home when not on the road.

Also, how will this affect my tax in my current job?

Any advise would be greatly appreciated...

TheWaterboy

You can claim certain expenses associated with your role as a Sole Trader.

You would be best advised to contact an accountant - they will give you alot better advice than anyone here and especially in relation to what you can and cannot claim expenses on.

As a Sole Trader you will need to submit your extra income annually and then pay any tax due on that less expenses.

mari2222

1. You will register as self-employed. For each tax year, your nett profit will be taxable (as well as your gross pay from being an employee elsewhere).

2. you can register online with ROS at revenue.ie and you can fill in the annual returns online when you get your login and pin/password set up. I assume you are a sole trader, (like most farmers/ doctors/ hairdressers etc) and not a limited company.

3. From your "sales" (what customers pay you) you can deduct expenses. The most obvious ones are the costs of your "raw materials" or products bought by you and sold on to customers.

4. Motor expenses are allowable in part - you should read the revenue briefing specifically on this. So keep receipts for petrol etc, and claim a proportion of them for the business use. Ditto motor tax/ car insurance/ car maintenance receipts.

5. Your phone costs are an expense like the motor expenses - a proportion will be allowed as expenses of business use.

6. Read up on tax from revenue website/ get brochure from local enterprise board/ talk to others / the tax rules change from time to time.
If your business dealings are not too complex, and if you are good at "sums", you could manage without an accountant for now.

Good luck in new business.

LJL

Thanks guys!

NumbrCrunchr

Hello LJL
Basically any receipted expense that you incur while running your business is deducted in working out your profit for income tax as a sole trader.
With a company you can charge civil service rates without receipts which can often be better.
Either should have no impact on your current job except possibly allow some tax relief on your PAYE income if you make sole trader losses.
Best of luck
numberCruncher