Self-Employed Paying My Tax

changepartners

Hi,

I know it is August but October 31st is approaching and I will be paying my tax as a self employed person for the first time. I have a straight-forward situation of being a contractor, I have all my monthly invoices on file and no expenses to speak of.

If I use ROS, will it be a matter of entering the total amount of my earnings and it giving me a calculation of what I must pay? Or is it more complicated than that?

If it is that simple, I want to do it myself and not spend the €300 I was quoted from an accountant. My earnings dont really justify going to an accountant but if it is much more complicated, I probably should...

srsly78

Nothing is straightforward. Noone can answer your question as you haven't provided any relevant details. "Self-employed" is ambiguous and can refer to either a company director or a sole trader, different rules apply to both. You probably do have allowable expenses but are unaware of them.

ROS does not calculate your tax liability. Pay for an accountant, e300 is worth it for peace of mind alone.

Abouttime

It my first time doing a return as self employed, could anyone recommend an accountant - Dublin area?

sebphoto

I'm also looing for an accountant who could help me with form 11E in Dublin. Anyone?

Alan Shore

changepartners wrote: »

Hi,

I know it is August but October 31st is approaching and I will be paying my tax as a self employed person for the first time. I have a straight-forward situation of being a contractor, I have all my monthly invoices on file and no expenses to speak of.

If I use ROS, will it be a matter of entering the total amount of my earnings and it giving me a calculation of what I must pay? Or is it more complicated than that?

If it is that simple, I want to do it myself and not spend the €300 I was quoted from an accountant. My earnings dont really justify going to an accountant but if it is much more complicated, I probably should...

You have to produce a profit and loss to establish your profit for the year.

When did you start?

The first year is based in the profit from the date of commencement to 31 December.

The second year is the profit for the first 12 months trading.

Do you use a car be careful with motor expenses google contractors project by Revenue. Basically if you have only one customer your place of work is deemed to be your customers base and travel to and from there is not a business expense.

Purchase of computer equipment is not a deductible expense but is allowed over 12.5% over 8 years.

changepartners

I have 1 customer and visit so infrequently, I don't even keep receipts for it. Purchased approximately €20 of office equipment. I basically do some hours and send in an invoice every month, not a huge amount of money involved either.

I have a few months from last year and will have a whole year to pay this year. I thought I could just calculate a percentage and the USC etc. off the gross earnings and pay it. If I need to do a profit and loss I may go back to my accountant!

srsly78

You still haven't said anything about being a sole trader, or about VAT.

Mobile Dj

changepartners wrote: »

Hi,

I know it is August but October 31st is approaching and I will be paying my tax as a self employed person for the first time. I have a straight-forward situation of being a contractor, I have all my monthly invoices on file and no expenses to speak of.

If I use ROS, will it be a matter of entering the total amount of my earnings and it giving me a calculation of what I must pay? Or is it more complicated than that?

If it is that simple, I want to do it myself and not spend the €300 I was quoted from an accountant. My earnings dont really justify going to an accountant but if it is much more complicated, I probably should...

" I have all my monthly invoices on file and no expenses to speak of"

Strange one to have no expenses, Car,fuel, servicing,computer, phone,heating, postage costs, electric,stationery, etc.. for example to produce an invoice you need a pc and a printer if posting.

Pay the €300 as a good accountant will advise you on expense list available and his fee is also and expense, expenses reduce profit so reduce tax liability.

changepartners

Well, for example, it is just my old computer I have for years... I email the invoices. Just a few hours freelancing while I am studying. I don't earn enough to register for VAT.

srsly78

You can choose to register for VAT if you want, it's optional since you are under the threshold. Adds a lot of extra paperwork tho.

You can claim the cost of your internet as well, since there seems to be a valid business use. Personal use can be considered incidental so long as it doesn't add any extra cost.

Consider the internet expense alone, probably more than e300/year. Thus with good advice from accountant you end up better off! Also, when it comes to accountant - geographical location is not so important once you can use email etc. Try to operate a paperless office too, it helps a lot. No more shoeboxes full of receipts!

changepartners

Thanks for the advice.

Can anyone give me an idea of the going rate for an accountant? 300 just seems a lot to me when my tax bill will probably be under a grand!

srsly78

Shop around. As said above, you will very likely save more than e300 due to the advice you get on expenses. Also, peace of mind!

QueenieB

Hi changepartners

Disclaimer: I am not an accountant.

I did the returns for a few years for my brother - small business, not a huge income, not enough for VAT but wanted to keep everything straight with Revenue. If you have a small income, you really can do it yourself.

To get the full value of a return, you must put down expenses as others have already pointed out here.

What I did was to list them all on a sheet and used the total for calculations on the returns. Submit the list with the form. The tax office will then work out what they can allow, if at odds with your calculations. As long as they are reasonable and with a small income, they are unlikely to challenge it.

Types of expenses:- phone, mobile phone, internet, stationery, electricity, car, fuel, work clothing, tools, etc. - anything you need to pay for/purchase in order to carry out your work. You stated that you are studying - is it related to your work? Ask Revenue if there are any allowances for that. Revenue won't offer you an allowance unless you ask for it! It seems very cumbersome when you start first and also, you may not have receipts. You may need to calculate reasonable estimates. (Tip: Keep all receipts from now on - a simple filing system will do and tot up all your income and outgoings/expenditure once a month on an Excel sheet).

Also, you can download the form to use for Self Employed Self Assessment from the Revenue site - IT10 (I think; you can easily check online). It is huge! However, there is a much, much shorter version available which is perfect for you and much less confusing. If you can't find it on the website, just ring Revenue.

There are some souls in the Revenue who are very helpful with advice. One lady gave me great advice on other items that were allowed, e.g. waste disposal charges, which helped greatly.

If you are married and your partner is working, you may consider having a joint assessment. Highly recommended if your income is low. You can reap the full benefit of joint allowances.

I hope that helps. Once we got one year year done, it was a doddle. My advice - keep it simple and get advice from Revenue.
QueenieB

changepartners

Thanks for that, my expenses are awkward as I'm a student living at home, so, none of the bills are in my name except for my mobile which I do use for work purposes. It goes to show, I never even thought about my mobile as an expense.

QueenieB

It's all about perspective. You are an adult so you are paying rent for your bed and board. Calculate a figure for your rent for the year. You work from home so cut that figure by a minimum of half. That is reasonable overheads/expenditure.

Revenue will only look for receipts, etc. if the figures you submit look unreasonable or suspect, e.g. your rent is €1000 but your earnings are only €800. The logical question here is: did you get anything to eat for the month?! If you are receiving any kinds of grants, social welfare supplements, etc., declare it. A lot of people think they might be somehow penalised. That is not the case. They allow for reasonable living living expenses.

It sounds like you don't have many expenses but make sure to declare them. You have to spend money to make money.

Also, don't forget to include any parts that you may have purchased for a job online or otherwise.
Best of luck.

Immy

I'm an accountant and tax consultant, work for myself from home so offer excellent rates. I have a few boards clients. PM me if interested.