Sole Trader and full time employed

whitearch

Looking for advice here that may have been asked before but I am having trouble understanding the ins and out.
Basically I am full time employed but often get offered work on the side and would love to try a make more from this but do it properly and pay the necessary tax etc.. I would love to be able to advertise what I do but afraid to do so unless I am paying the correct tax etc..
The issue is that I have no idea what I need to do this? Is setting up as a sole trader enough? Then what are my tax liabilities? Do I need separate bank accounts? Do I need to be VAT registered also?
Is there anyone out there that could offer me this advice as I cannot afford to pay a tax consultant to answer my questions but this may be quite simple to some people here.

aristotle25

Some pointers for you:

1) You need to register as self-employed with the revenue.

2) You don't need to register for VAT if your expected income is less than a certain threshold, I think it is €50k per year but you should check. If you don't register for VAT then you don't charge VAT to your customers.

3) You pay tax on your self employed income by October\November of the following year and you can claim expenses. You need an accountant for this unless you are comfortable with various revenue forms. You can advertise and claim that cost as an expense. You can reduce\minimise your tax bill by contributing to a pension, again talk to your accountant. Accountant fees for submitting tax returns can be in the 250-500 euro range.

4) Be aware that as a sole trader you are liable to any problems if a customer were to sue you for something. Just be aware of that but probably a low risk depending on what you are doing.

5) You don't need to open another bank account.

6) keep records of all income and costs.

7) Just check your employment contract as some state you cannot work at other things. You can decide if you want to ignore it or not.

8) Be aware that that you also need to pay "preliminary tax" for the following year so from a cashflow point of you just be aware of it. The way it works is you pay tax due for last years accounts and the "preliminary tax" has to be paid for the following year as well. The preliminary tax could be zero but it could be the same amount of the tax due for last year as well depending on your accounts and whether you use pension contributions to lower you tax bill. If you pay preliminary tax it is balanced again any tax liability for the following year so you might get some or all of it back or have to pay a bit extra etc.


Talk to an accountant, you don't need a tax expert.

Quebec Delta Mike

I second all Aristotle25 said above. Sound advice...and free!

Just start as you mean to continue, to avoid headaches later. I would also endorse his advice re vat. Stay away from it unless you absulutely have the sales to justify it.

1. Keep a Cash book. Log all Income and Expenditure.
2. Keep receipts for everything you spend. Food, clothes, petrol, diesel..they all count towards your expenses and allowances.
3. If issuing Receipts, especially by email, keep hard copies and make sure they are protected PDFs.

Talk to a good accountant, he should be able to keep you on the straight and narrow.

QDM.

aristotle25

Just on the receipts and expenses - you can only claim for expenses that were incurred or are related to the service\product as part of your sole trader work.

Accountant will explain and give you info.

whitearch

THanks guys
Really appreciate the info!
Complete novice to this and could never understand it but what you say makes sense.