When to declare earnings?

theshamu

Lads,

At what point do you have to start paying tax or your online earnings eg. Adsense, click bank earnings and so on.

And what is the best way to do It, set up a marketing company from home? I also read somewhere that if you do set up a company you can claim elec, phone, Internet off the tax bill??

Just planning for the future :cool:

Cheers!

market myself online

Hi,

it would be best to consult an accountant, however here are the basics you need to know...

1. you need to register as a sole trader if you are serious about internet business beyond a few hundred quid here or there that the tax office wont care about.

2. You will only pay tax on profits over a specified amount, I think it is currently Eur9000. You DO NOT pay on turnover only on profit.

3. This means that the more legitimate expenses you have a record of (hosting bills/ utility bills/ computer parts), the more you can deduct them from your income and therefore demonstrate a lower profit, and therefore not have to pay tax.

4. While its good to keep a record for your own sake and to make sure you have enough cash at any given time to pay for your expenses... You dont really need to bring everything together until after the end of your first year trading. Then all you need to do is hand all your receipts and income statements to an accountant for a few hundred euros.

5. The most important thing in any business is just to get started, you can agonise about these issues for years and never get anything done. The tax office is never going to prosecute you for the sake of a few hundred quids worth of tax especially in your first few years of trading.


Lindsay

theshamu

market myself online wrote: »

Hi,

it would be best to consult an accountant, however here are the basics you need to know...

1. you need to register as a sole trader if you are serious about internet business beyond a few hundred quid here or there that the tax office wont care about.

2. You will only pay tax on profits over a specified amount, I think it is currently Eur9000. You DO NOT pay on turnover only on profit.

3. This means that the more legitimate expenses you have a record of (hosting bills/ utility bills/ computer parts), the more you can deduct them from your income and therefore demonstrate a lower profit, and therefore not have to pay tax.

4. While its good to keep a record for your own sake and to make sure you have enough cash at any given time to pay for your expenses... You dont really need to bring everything together until after the end of your first year trading. Then all you need to do is hand all your receipts and income statements to an accountant for a few hundred euros.

5. The most important thing in any business is just to get started, you can agonise about these issues for years and never get anything done. The tax office is never going to prosecute you for the sake of a few hundred quids worth of tax especially in your first few years of trading.


Lindsay

Hi Lindsay,

Thanks for the useful information, really helpful. I'm currently employed (3 day week) but want to get into on-line marketing, doing a dip. course in Sept but been researching it for the past 12 months. Would you suggest setting up as a sole trader now whilst employed or wait until I start to see some earnings?

Again thanks for the advice.

market myself online

It would probably be easiest to wait, until you are making some money, as the tax office would not be bothered about small amounts which filter through, you can probably get away with up to a few hundred quid per month before you actually need to register, but you definitely need to do it after that.

When ever you do register though, remember that exactly one year after that date you will need to collate your receipts and income ready for an accountant to review and submit a tax return. You can also do this yourself to save Eur800.


Lindsay