Sole Trader Startup - How to pay taxes

Bust_A_Move

Hi all,

Really lost tax wise here.

I'm currently full time employed, and am a PAYE employee paying the usual tax and so on.

I've also started Freelancing in the last couple of months, and I've earned a small amount of cash in the last couple of weeks. Nothing huge, but I want to make sure that everything stays above board.

I'm freelancing as a sole trader, and for convenience sake I've registered a business name, and have started operating under the business name.

As it stands, while I'm aware I need to declare any income as a sole trader, I don't know how to do that when also working as a full time PAYE employee. Is there a form I can fill in? I've tried reading through the public information on the goverment sites, but I wasn't able to find anything that really comfortably answered my question. Given that I'm already in the higher tax bracket from my earnings of my full time job, what's the tax rate from any of my freelance work? As I have freelance related costs (Materials, website maintenance etc, etc.) can I claim taxback on any of those costs?

Given that I had to front some capital to start the freelancing, how do I declare the difference between 'Profit' and 'Operating Cost'? I.E. If I was printing Fliers, and I bought 100 sheets of paper at 10cent each, but sold them on at 15cent per page, how do I ensure I only pay tax on the 5 cent profit, and not the 10cent that I make back to cover my costs?

I'm very confused and would appreciate anywhere that I could go for help. I'd be willing to pay to consult with a tax expert, but I would prefer to speak with them via email rather then have to go in for a formal meeting (I just find it annoying to arrange), so if anyone had a recommendation for an accountant that I could work with online that would be amazing.

Daniogroove

Not an answer to your question but under the Start Up Refunds for Entrepreneurs (SURE) scheme you may be entitled to a refund of PAYE income tax that you paid over the 6 years before the year in which you invest in starting a business.
Every little helps

hairyslug

Are you registered for paye online, if so you can register for ROS and do it all through that (I think)

OttoPilot

Bust_A_Move wrote: »

Hi all,

Really lost tax wise here.

I'm currently full time employed, and am a PAYE employee paying the usual tax and so on.

I've also started Freelancing in the last couple of months, and I've earned a small amount of cash in the last couple of weeks. Nothing huge, but I want to make sure that everything stays above board.

I'm freelancing as a sole trader, and for convenience sake I've registered a business name, and have started operating under the business name.

As it stands, while I'm aware I need to declare any income as a sole trader, I don't know how to do that when also working as a full time PAYE employee. Is there a form I can fill in? I've tried reading through the public information on the goverment sites, but I wasn't able to find anything that really comfortably answered my question. Given that I'm already in the higher tax bracket from my earnings of my full time job, what's the tax rate from any of my freelance work? As I have freelance related costs (Materials, website maintenance etc, etc.) can I claim taxback on any of those costs?

Given that I had to front some capital to start the freelancing, how do I declare the difference between 'Profit' and 'Operating Cost'? I.E. If I was printing Fliers, and I bought 100 sheets of paper at 10cent each, but sold them on at 15cent per page, how do I ensure I only pay tax on the 5 cent profit, and not the 10cent that I make back to cover my costs?

I'm very confused and would appreciate anywhere that I could go for help. I'd be willing to pay to consult with a tax expert, but I would prefer to speak with them via email rather then have to go in for a formal meeting (I just find it annoying to arrange), so if anyone had a recommendation for an accountant that I could work with online that would be amazing.

Register for myAccount on revenues website, you can declare extra income there.

Your marginal tax rate will be the tax rate on your profits, so if you're paying 52% on your last Euro earned it will be 52%.

For determining what costs you can claim as costs I'd suggest buying a tax textbook or consulting an accountant if you'd rather. Keep receipts for everything.

Zenify

Hi

You need to go onto www.ros.ie and register yourself. It's a simple enough process with a step by step guide.

Once you are all set up you will be able to complete tax returns online. While completing the tax return you will input your p60 details which show your earnings and tax paid on it. Then you will input your freelance earnings which add to this figure (minus expenses) and you will have to pay extra tax (yes it will all be at higher rate if your paye income has already exceeded the standard).

If you are unsure of what are expenses and what aren't I would recommend you pay someone to do your tax return for you.

relax carry on

Everyones tax situation is unique to them. Establishing your possible tax liability for non paye earnings should have been one of your first steps before commencing to trade. For your own sake find a competent accountant and get some professional advice for starting off. You may also decide to retain the services of an accountant for your tax returns.

http://www.revenue.ie/en/business/running/registering-tax.html

Mrs OBumble

This is the relevant part of the Revenue website: http://www.revenue.ie/en/business/running/registering-tax.html#section2

If your revenue (ie total money you make from the business) is less than the VAT threshold (info about this here: http://www.revenue.ie/en/tax/vat/guide/registration.html#section2) then you do not HAVE to register or submit returns on-line. You may do it on-line - but many people find the old-fashioned paper forms are easier to get their head around to start with.

My advice is that if you are anywhere near the VAT thresholds, you definitely need to engage an accountant. But if you're not, then it's likely not necessary.

You need to register for Income Tax. Use the form TR1, available from the first link above. Use the information available from that link to understand what records you need to keep, and what expenses you can claim.