Semi Self employed and paying tax

hairyslug

Hey, Im looking for a few answers please, Im an employee and am looking at starting up my own business on the side, I have been selling a few bits on ebay and have found a market for, basically stuff I can get for free.

Now my question is, my estimated profit after my main expenses will be around 7000 a year, what taxes will I be paying on this and what do I pay on what I keep for myself.

With the money that I do make from it, do I need to add it to my current wage pay paye on that.

Sorry, Im sure this is basic stuff but I dont want to go to an accountant, pay him and then for him to tell me this is not viable.

Thanks

mari2222

You will return all of your income for self assessment, including the income from being an employee.

Your taxes will then be calculated on the total (through the online service ROS).

You will likely have had deducted enough tax to cover the "employee" portion, so you will end up with a bill for tax on the profits you make from the self-employed bit.

Hope that helps!

Mongarra

The amount of your total income, including PAYE income, will decide the rates of tax, PRSI and Universal Social Charge (USC) at which you will be liable.

As you are half-way through the year it would not be advisable for 2012 but for future years, if you want to do it, you could ask the tax office to reduce your tax credits used against your PAYE income. This would result in you paying more tax on your PAYE income than you would have done if you kept your tax credits but it will mean you will not have as big an amount to pay on the self-employed income.

You will need to register for income tax (you can do this online at www.Revenue.ie) and if your commencement date is in 2012 you will need to file a return of income for 2012 by 31st October 2014. Normally it would be the following 31st October but as it is your first year you get an extra year to file. Your 2013 return will be due by the same date and after that each 31st October will be the date for the previous year's return.

You will also need to make a payment on account (called Preliminary Tax) each year by 31st October. For 2012 you can delay the payment until October 2013 but at that stage you will have to pay the 2013 Preliminary tax as well so it would be wise to either put some savings away to allow for that or even pay before you have to and the temptation to spend it will not arise.

Mongarra

Sorry, I should have mentioned, in response to your initial question, you pay tax etc. on your profits and the amount you keep for yourself has no bearing on the tax liability. For example, if your profit is €7,000 (using your figure) and you keep €5,000 for yourself, you will pay tax etc. on the €7,000. If your profit is €7,000 and you take €10,000 for yourself (assuming your bank manager will allow an overdraft!) you will still pay tax on the €7,000.

relax carry on

hairyslug wrote: »

Hey, Im looking for a few answers please, Im an employee and am looking at starting up my own business on the side, I have been selling a few bits on ebay and have found a market for, basically stuff I can get for free.

Now my question is, my estimated profit after my main expenses will be around 7000 a year, what taxes will I be paying on this and what do I pay on what I keep for myself.

With the money that I do make from it, do I need to add it to my current wage pay paye on that.

Sorry, Im sure this is basic stuff but I dont want to go to an accountant, pay him and then for him to tell me this is not viable.

Thanks

Revenues guide to self assessment might be of assistance to you.

http://www.revenue.ie/en/tax/it/leaflets/it10.html