Some quick question noob alert..

Ronan|Raven

Howdy.

Some swift questions as I do try and read up on things like this but fail miserably.

My wife is looking at setting up a small business doing bespoke furniture, I do not expect revenue to exceed 5k P/A

She is currently in full time PAYE employment.

1: Registering a company name - register via CRO as sole trader?
2: do you need to file returns even if expenditure does not exceed €5,000
3: Impact to tax affairs as a PAYE worker?

Any advice greatly received.

Ogogo

The answer to your question is a definitive "it depends".

There are certain benefits to setting up a limited company in Ireland. Some of the benefits are;

• Limited Liability
• Separate Legal Entity
• Tax efficient

In short, as limited liability company the business owner is protected under most circumstances from the liabilities of the business. The business is considered a separate legal person and profits retained within the business are taxed at 12.5% v's the typically higher personal/income tax rates.

To balance this, there are not insignificant responsibilities placed on the company directors to maintain company records and file certain returns to both the CRO and the revenue. Companies regardless of size are obliged to have their annual accounts audited by a registered auditor (although there is an exemption under certain circumstances for small companies).

In short, even as a sole trader you will be obliged to file annual tax returns to revenue and pay your taxes (if appropriate)

It may be difficult to justify the cost and complexity of running a limited liability company with a turnover of €5,000. Instead it might be cheaper to insure yourself against product liability etc.

If you do setup a ltd company - you can leave your tax credits with your existing employer and as such your new venture will have no immediate impact on your PAYE employment. If you wanted to be paid from your new company you can pay yourself a salary and have PAYE, PRSI, USC and all the usual deducted at source and the company pays this to the revenue.

If you were running this as a sole trader you file an annual return to revenue (not sure is this Form 11 or FORM 12) where you outline your PAYE income in addition to your Profit and Loss from your business.

In any case - I am not an accountant, there are a very many good accountants who wont charge an arm and a leg for good advice on this stuff (you will get a lot of advice in an hour long session) - you will probably even get an initial session with most accountants for free.

Best of luck with it in any case.

Ronan|Raven

Ogogo wrote: »

The answer to your question is a definitive "it depends".

There are certain benefits to setting up a limited company in Ireland. Some of the benefits are;

• Limited Liability
• Separate Legal Entity
• Tax efficient

In short, as limited liability company the business owner is protected under most circumstances from the liabilities of the business. The business is considered a separate legal person and profits retained within the business are taxed at 12.5% v's the typically higher personal/income tax rates.

To balance this, there are not insignificant responsibilities placed on the company directors to maintain company records and file certain returns to both the CRO and the revenue. Companies regardless of size are obliged to have their annual accounts audited by a registered auditor (although there is an exemption under certain circumstances for small companies).

In short, even as a sole trader you will be obliged to file annual tax returns to revenue and pay your taxes (if appropriate)

It may be difficult to justify the cost and complexity of running a limited liability company with a turnover of €5,000. Instead it might be cheaper to insure yourself against product liability etc.

If you do setup a ltd company - you can leave your tax credits with your existing employer and as such your new venture will have no immediate impact on your PAYE employment. If you wanted to be paid from your new company you can pay yourself a salary and have PAYE, PRSI, USC and all the usual deducted at source and the company pays this to the revenue.

If you were running this as a sole trader you file an annual return to revenue (not sure is this Form 11 or FORM 12) where you outline your PAYE income in addition to your Profit and Loss from your business.

In any case - I am not an accountant, there are a very many good accountants who wont charge an arm and a leg for good advice on this stuff (you will get a lot of advice in an hour long session) - you will probably even get an initial session with most accountants for free.

Best of luck with it in any case.

Thank you Ogogo. Appreciate the reply.