How to tax my blog's income

tomde · 03-11-2014 11:59am #1

Hi, I moved to Ireland last year and looking for advise on taxation.

I am a non-EU national, employed full-time (40K+ a year). Recently I launched a blog which started to make 2-4k per month, but I also have costs (1-2k per month to advertise it).

If I understand correctly, using sole trader solution (given my higher tax bucket) I would have to pay around 50-52% off my income which makes it unprofitable.

Limited company is taxed at 12,5%, my question is how do clear my ltd company's income into my personal account? Is there another tax and if so which?

Thanks for all helpful comments,
Tom

Mr. Incognito · 03-11-2014 3:33pm

Pay an accountant?

Tow · 03-11-2014 4:21pm

tomde wrote: »

Limited company is taxed at 12,5%, my question is how do clear my ltd company's income into my personal account? Is there another tax and if so which?

You can use your internet banking to move the company money into your personal account, but then have to pay the 50-52% tax on it!

tomde · 03-11-2014 4:40pm

Tow wrote: »

You can use your internet banking to move the company money into your personal account, but then have to pay the 50-52% tax on it!

Thanks! Is there any other formation which could let me stay profitable?

Gard1 · 03-11-2014 5:19pm

tomde wrote: »

Hi, I moved to Ireland last year and looking for advise on taxation.

I am a non-EU national, employed full-time (40K+ a year). Recently I launched a blog which started to make 2-4k per month, but I also have costs (1-2k per month to advertise it).

If I understand correctly, using sole trader solution (given my higher tax bucket) I would have to pay around 50-52% off my income which makes it unprofitable.

Limited company is taxed at 12,5%, my question is how do clear my ltd company's income into my personal account? Is there another tax and if so which?

Thanks for all helpful comments,
Tom

you only pay the 52% on your net profit ie 4k less 2k costs = 2k meaning tax at aprox 1k still leaving you up 1k

Ltd company is an option but better go with sole trader until it develops unless you need the limited liability to protect you personally from liable proceedings if someone sues the blog

tomde · 03-11-2014 7:29pm

Thank you, so there's no cheaper (legal) options then?

Gard1 · 03-11-2014 7:34pm

tomde wrote: »

Thank you, so there's no cheaper (legal) options then?

A lot of this also depends on your status single married if married what income has your partner.

Ltd co will attract corporation tax at 12.5% if you don't need the money to live on then you can leave it in the company it will only attract the high tax rate if you take money back out in a salary

CIARAN_BOYLE · 03-11-2014 11:04pm

tomde wrote: »

Hi, I moved to Ireland last year and looking for advise on taxation.

I am a non-EU national, employed full-time (40K+ a year). Recently I launched a blog which started to make 2-4k per month, but I also have costs (1-2k per month to advertise it).

If I understand correctly, using sole trader solution (given my higher tax bucket) I would have to pay around 50-52% off my income which makes it unprofitable.

Limited company is taxed at 12,5%, my question is how do clear my ltd company's income into my personal account? Is there another tax and if so which?

Thanks for all helpful comments,
Tom

As a soletrader you would be paying 51/52% of your profit (income - expenses).

You may be able to attribute some extra expenses to your sole trade and I would advise talking to an accountant about this.

Also I would consider whether contributing to a pension for tax relief may be a good way to reduce your tax exposure.

Arbiter of Good Taste · 05-11-2014 12:29am

Gard1 wrote: »

A lot of this also depends on your status single married if married what income has your partner.

Ltd co will attract corporation tax at 12.5% if you don't need the money to live on then you can leave it in the company it will only attract the high tax rate if you take money back out in a salary

Except that it will be a close company, so potential close company surcharge if he doesn't take enough out as salary or dividend.

barneystinson · 05-11-2014 9:05am

Arbiter of Good Taste wrote: »

Except that it will be a close company, so potential close company surcharge if he doesn't take enough out as salary or dividend.

Except that the close company surcharge applies to investment and estate income, and this will be a trading company. He'll be a long time accumulating enough profit to be worried about close co surcharge on the interest...

Unless you're talking about the professional services company surcharge, which also obviously won't apply, as the company won't be carrying on a profession or a professional service.

Arbiter of Good Taste · 05-11-2014 9:22am

barneystinson wrote: »

Except that the close company surcharge applies to investment and estate income, and this will be a trading company. He'll be a long time accumulating enough profit to be worried about close co surcharge on the interest...

Unless you're talking about the professional services company surcharge, which also obviously won't apply, as the company won't be carrying on a profession or a professional service.

Good point. It's a while since I worked with small companies so am rusty

OP example of why you should get proper advice rather than relying in internet randomers.