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Registering as a sole trader while I have a job

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  • 03-06-2015 10:29pm
    #1
    grizzly_beer
    Registered Users Posts: 110 ✭✭


    So I have a regular job as a softwarer engineer, working fulltime. I get paid monthly and my employer sorts out all the tax and prsi and so on. (about which I am blissfully ignorant)

    I had a deal with my previous employer where I get a small percentage of sales of an asset we released (until this coming October) The total amount they owe me is trifling, like, a couple of 100 euro so far, but it might be over a grand by October.

    Its awkward for them to pay me this as I dont work for them anymore cus of tax and so on and they are just holding on to it for me atm. Unless I registered my own business in which case they could pay me one business to another and then I can sort out my own tax.

    The reason I'm bothering considering registering as a sole trader for this is because I do want to start my own business making small indie games myself in the future (like in a year or so) so if I'm going to have a business why not get registered and set up now?

    Anyway I'm mainly wondering if I did register as a sole trader and got paid in that capacity by my previous company will I have to do any tax stuff myself, fill out forms or whatever?

    ps. Also if I buy computer hardware or software that I am using to build my indie games can I buy that as a business and not pay vat?

    Thanks for anyone answering this and dealing with my massive ignorance. Ive been looking here
    http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html
    But I really want a human to explain this stuff to me.
    Tagged:


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    #2
    jimmii
    Registered Users Posts: 14,810 ✭✭✭✭jimmii


    Yeh you would be responsible for your own tax returns. Its not that hard but you could always get an accountant to do it for you if you really wanted.

    VAT on purchases would depend on whether they were bought from VAT registered Irish companies or not if they are from a VAT reg'd Irish company you would pay VAT on it at the point of purchase and then claim in back in your bi-monthly filings. If you were buying from another country then you are able to buy it without the VAT on.


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    #3
    grizzly_beer
    Registered Users Posts: 110 ✭✭grizzly_beer


    @ jimmii

    "Yeh you would be responsible for your own tax returns"

    So will my work pay tax on my salary and then I separately pay tax on whatever my business earns (which will be almost nothing most of the time)


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    #4
    jimmii
    Registered Users Posts: 14,810 ✭✭✭✭jimmii


    grizzly_beer wrote: »
    @ jimmii

    "Yeh you would be responsible for your own tax returns"

    So will my work pay tax on my salary and then I separately pay tax on whatever my business earns (which will be almost nothing most of the time)

    Yeh you fill out a form with the additional income and then pay the tax on that.


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    #5
    adrianw
    Registered Users Posts: 236 ✭✭adrianw


    the potential grand you are to receive is a payment in relation to your previous employment. This is PAYE income, irrespective of whether or not you are still an employee. It is no different than realising a few months after you left that they under paid you.
    If they paid you as a business, you will still need to pay all the relevant taxes but they would be avoiding Employers PRSI, which Revenue would not be too happy about.


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    #6
    FishOnABike
    Registered Users Posts: 4,393 ✭✭✭FishOnABike


    adrianw wrote: »
    It is no different than realising a few months after you left that they under paid you.

    Surely circumstances have changed. OP is no longer an employee of company #1.


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    #7
    adrianw
    Registered Users Posts: 236 ✭✭adrianw


    FishOnABike wrote: »
    Surely circumstances have changed. OP is no longer an employee of company #1.

    The payment is from a previous employer and was an agreed payment for work carried out. It's not just a parting gift his fellow employees gathered together to put in a card.
    Plus he has said his previous employer is just holding onto it at the moment - i assume trying to clarify whether or not it is salary. He was clearly due the money before he left.


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    #8
    Mrs OBumble
    Registered Users Posts: 25,745 ✭✭✭✭Mrs OBumble


    jimmii wrote: »
    Yeh you fill out a form with the additional income and then pay the tax on that.

    Not quite.

    You will out a form with ALL your income, and you pay and the difference between what you have already paid via PAYE and what is due.


    OP, you need an accountant to advise on the liabilities issues I think: they will need to see the contract you has with your previous employer regarding the extra payments.

    You can register as a sole-tracker without registering a business, and the could pay you in that capacity. However some companies have internal policies that they only deal with businesses, so they may want you to register a business. But I would resist this, unless you need to the protection that incorporated status offers.


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