Leap from Sole Trader to Company

Agrian Brian

Hi all,
young dairy farmer here, just had my first income tax return recently. My wife works off farm so it was quite a hefty bill. My accountant wants me to at least consider the company option in the next while.
I know the saving to be made with the company route but my initial reaction is reluctance. I feel it's very early in my farming career to be considering this change as a further layer of complexity and upheaval I could do without having only recently come through the 'ordeal' of the farm transfer.

Any other farmers in a similar situation at this time? All thoughts appreciated.

Vamp369

Hi, I'm a sole trade, different industry tho.

I asked my accountant about the pros/cons of going doing the limited company route. I couldn't really see much of a benefit. You have to pay personal income tax and corporation tax. You get the PAYE tax credit, €1650, but it depends on the figures if that would benefit you when also paying 12.5% corpo tax.

At least being a limited company reduces your personal liability tho if things don't work out.

duffysfarm

i dont think you are entitles to the full paye credit. if you are a proprietary director i.e. own more than 15% of the shares then you dont get the paye credit. you will get the new earned tax credit which is €550 for 2016 and was increased in the recent budget to either €900 or €950 for 2017

Vamp369 wrote: »

Hi, I'm a sole trade, different industry tho.

I asked my accountant about the pros/cons of going doing the limited company route. I couldn't really see much of a benefit. You have to pay personal income tax and corporation tax. You get the PAYE tax credit, €1650, but it depends on the figures if that would benefit you when also paying 12.5% corpo tax.

At least being a limited company reduces your personal liability tho if things don't work out.

vincenzolorenzo

What are the requirements for setting up a limited company? Do you have to submit accounts signed off by chartered accountant every year? Is there a minimum turnover you have to reach?

Buford T. Justice XIX

duffysfarm wrote: »

i dont think you are entitles to the full paye credit. if you are a proprietary director i.e. own more than 15% of the shares then you dont get the paye credit. you will get the new earned tax credit which is €550 for 2016 and was increased in the recent budget to either €900 or €950 for 2017

It's 950 euros for next year.

The expectation is that parity will be achieved in the next two budgets rather than the next as was promised.

lakill Farm

vincenzolorenzo wrote: »

What are the requirements for setting up a limited company? Do you have to submit accounts signed off by chartered accountant every year? Is there a minimum turnover you have to reach?

no turnover minimum

cost of sole trader versus Limited co is minimal once you file with CRO by ARD and the entity is kept CRO audit exempt

CRO = Companies registration Office
ARD - Annual return date

Buford T. Justice XIX

I came across this article earlier and thought it might help clarify some issues for people.

https://www.thinkbusiness.ie/articles/turn-your-farm-into-a-limited-company/?platform=hootsuite

lakill Farm

Buford T. Justice V wrote: »

I came across this article earlier and thought it might help clarify some issues for people.

https://www.thinkbusiness.ie/articles/turn-your-farm-into-a-limited-company/?platform=hootsuite

Lorna is a pain in the hole and a media slut

:rolleyes:

vincenzolorenzo

lakill Farm wrote: »

Lorna is a pain in the hole and a media slut

:rolleyes:

Jaysus tell us what you really think! :pac: