Business Newbie - A few questions

SwordofLight

Hi everyone,

I'm trying to get something off the ground. I have been a sole trader before although maybe not a very good one. My business is simple - purchasing stock from abroad, storing it here, delivering it to consumers. I am willing to initially buy €2000 worth of stock, and do all of the internet website and marketing myself. I would like to rent a small office. I have some questions.

1. I have a private car, can I trade it in with a dealer for a van, pay via monthly installments, and claim the cost of these installments as expenses? ie. is the van claimable as a sole trader?

2. If I rent an Office to store stock and conduct business, with its own door street entrance, can I claim the rent as an expense? Can I use the office as an appointment only sales retail store? Can a sole trader run a retail store?

3. I am already set up with the CRO as a person trading as 'business name', but this has not been very successful. Can I set up another me trading as 'business name', alongside the existing one?

Any help gratefully appreciated!

dbran

Hi

It would depend on how the arrangement for the purchase of the van is structured, whether it is a lease or a hire purchase or a loan arrangement. You would normally be able to claim capital allowances and interest or the rental payments. There may be an argument to disallow any private usage of the Van as a sole trader.

The office can be claimed as a business expense provided the cost is incurred whole and exclusively for the purposes of trade.

You can set up as many business names as you wish.

Hope this helps

dbran

jimmii

And there is nothing stopping you from running a retail store as a sole trader. €2000 worth of stock isn't going to get you very far with a shop though. We're looking at opening a new tiny shop (<100sqm) and are budgeting 10k minimum for stock. To do the internet and marketing properly its going to take up a lot of your time that could be spent growing your business in other ways. I tried to do that sort of thing myself in the end gave up and hired someone else to do it!

SwordofLight

Thanks a million for the replies, I have to say it's great to have people to talk to because I'm finding this process very daunting.
So, if I've gathered correctly, I can go trade in my car against a hire purchase van (work out a deal), ultimately as I'm a sole trader, the van is mine and not belonging to a company, as would be the case if I was a limited company (thus making the trading in of my personal car a bit stupid)... but if the van was mine, then I shouldn't be allowed to claim it's cost on expenses should I? Can you please explain that a bit more? (sorry)
What is meant by the cost incurred as a whole (the office question)? I am intending to rent a small office by the month, that has its own street door entrance, and use it partly for direct customer sales. Do I need a licence or something to have a retail store or would I just need to clear my intentions with the owner?
I'm only getting 2k of stock because it's all I can afford! I'm taking the risk that I'll be able to get in more stock based on the sales of that and somehow keep the thing rolling!
Am not too bad with design and marketing, but its very time consuming yes, and I'm no expert. Maybe I'll get a better website when more money comes in.

Do I have the theory messed up regarding VAT - if the goods have been imported from outside the EU, and I haven't been charged VAT, then I charge the consumer the 23% on the retail price, but I don't claim any VAT back on the goods purchased.
However if I'm buying goods within the EU, and am charged VAT, then I charge the consumer the 23% on the retail price, then because I have an invoice with VAT paid on it, I can submit it and claim it back?
My end of year returns add up all my expenses plus VAT paid on goods, and this is levied against the revenue taxing all of my profits at 20% (provided my profits are not over €32,800). Hope I'm correct so far. But if all of my monies are in the same account, at the end of the year, if I've been taxed on monies and calling the rest net profit, then how will I avoid revenue taxing me again the following year on that net profit I've already paid tax on?
As you can tell I am terrible at business finances, I remember during the junior cert doing Business Studies class and just staring at the teacher for the year, she was a cracker

jimmii

I would suggest you do a start your own business course at your local enterprise office as that will answer a lot of these questions regarding tax etc. They aren't free but definitely worth doing.

pedroeibar1

jimmii wrote: »

I would suggest you do a start your own business course at your local enterprise office as that will answer a lot of these questions regarding tax etc. They aren't free but definitely worth doing.

+1.
Lots of misconceptions in the OP, e.g. on HP the car will not be 'yours' until the 'option to purchase fee' is paid.
A SYOB course will be worth its weight in gold and give you more confidence to tackle the challenges.

jimmii

pedroeibar1 wrote: »

+1.
Lots of misconceptions in the OP, e.g. on HP the car will not be 'yours' until the 'option to purchase fee' is paid.
A SYOB course will be worth its weight in gold and give you more confidence to tackle the challenges.

They are great for getting to grips with things like VAT which seems to be something needed in this case. I think the OP would definitely get a lot out of doing one in fact I think they should pretty much be mandatory for anyone looking to open a business for the first time!

SwordofLight

LOL I take it my logic is terrible then Am I totally wrong

jimmii

SwordofLight wrote: »

LOL I take it my logic is terrible then Am I totally wrong

Not a million miles off but the course would definitely move you in the right direction!

SwordofLight

Ok, I studied VAT for the past few hours and I get it now. Was a bit rusty lol. Not going to register for VAT, therefore none of the above applies because I won't be able to claim any expenses or VAT back. Simples. Was reasoning that it's probably a good idea to start off not charging VAT on goods to keep retail prices low, in order to get a foothold in the market.

jimmii

SwordofLight wrote: »

Ok, I studied VAT for the past few hours and I get it now. Was a bit rusty lol. Not going to register for VAT, therefore none of the above applies because I won't be able to claim any expenses or VAT back. Simples. Was reasoning that it's probably a good idea to start off not charging VAT on goods to keep retail prices low, in order to get a foothold in the market.

There is little difference in the retail price unless you are ordering in small amounts from outside the EU and selling on. Not being registered makes it seem like you are running a small operation which might give people concerns over whether you are able to fulfill larger orders etc.

SwordofLight

People will just be ordering goods worth about €30 at a time. Can't see them worrying about fulfilled orders? I'll just be putting my [name T/A business name] on the bottom of the homepage or 'About Us' section. Do I need to put my PPS number as well?

ciku202

pedroeibar1 wrote: »

+1.
Lots of misconceptions in the OP, e.g. on HP the car will not be 'yours' until the 'option to purchase fee' is paid.
A SYOB course will be worth its weight in gold and give you more confidence to tackle the challenges.

Where to register SYOB course and how much it will cost? Great to have all members here who are willing to here.

jimmii

ciku202 wrote: »

Where to register SYOB course and how much it will cost? Great to have all members here who are willing to here.

Go to your local enterprise office and they will have a list of courses and prices.