Self assessed tax declaration

thewiseowl12

Hi,

I was wondering if anyone can advise on the following:

I am a PAYE worker here in Ireland that has provided on/off statistical advice to a man based in England for the past 2 years. Obviously there are tax implications of this extra income and I am now attempting to submit my tax returns for last year (which I wished I had tackled sooner!)

I am just wondering what the story re: VAT is, and whether it applies in this context? Last year we had a simple verbal agreement re: hourly rate, etc but no discussion regarding VAT, I suppose probably as the man employing me was not doing so as a company. It was more of a nixer type job on my part.

Does this mean I will have to treat the amount I was paid last year as including VAT, subtract it, and then pay income tax on the rest?

This year my "employer" (I only work for him in my spare time outside of my normal job) has set up a company and I have a (confidentiality) contract with the phrase "exclusive of VAT" included in the hourly rate: do I take it that this means the company will cover any necessary VAT payment? Of course, this just affects my tax returns for this year which will be submitted next year.

I'd be grateful for any advice on the above and apologies in advance if my post is not sufficiently clear.

Many thanks.

nompere

The general rule is that business to business services are deemed to be supplied where the recipient has its place of business. That's in the UK, not here. So it is probable that your UK-based client has to charge itself UK VAT - and recover it at the same time.

It usually makes no difference whether the Irish business needs to register or not.

It is also probable that you don't have any need to register for VAT here, and that you only need to worry about your income tax.

I do think you would do very well to spend an hour or so with a professional to get your mind fully set at ease.

thewiseowl12

Nompere, thanks very much for your prompt response.

Do you have an idea of what the hourly rate for such tax advice would be (broadly)?

nompere

Depending on the person, anything from around €100 up to €400.

VAT specialists tend to rate themselves highly. Some of them even deserve that rating!

Then again, the cost of making VAT mistakes can be disproportionately high. Revenues, both here and in the UK, are often unforgiving.