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Sub contractor, at threshold -VAT?

  • 05-12-2017 12:37am
    #1
    OU812
    Registered Users, Registered Users 2 Posts: 6,088 ✭✭✭


    Currently working on a contract for a company who is, in turn, contracting me to a multi-national.

    I've been putting away money for PAYE etc, but have just hit the threshold last month for VAT.

    Their/my contract with the multinational is due to expire in January, so there are two invoices to go (Dec & part of Jan). It's been mentioned that I may be extended until June & they may take me on full time then or extend again.

    Obviously, I need to be tax compliant, so can I:
    1. Just register for VAT (not a limited company)?
    2. If things don't work out or I get taken on full time, de-register?

    Separate questions
    1. What percentage should I be putting away for PAYE/PRSI/USC?
    2. Can I reduce my tax liability by putting some of this money I've been holding money into a pension?


Comments

  • #2
    thedeere
    Banned (with Prison Access) Posts: 63 ✭✭thedeere


    Do not consider cash anyway.


  • #3
    exaisle
    Registered Users, Registered Users 2 Posts: 2,675 ✭✭✭exaisle


    OU812 wrote: »
    Currently working on a contract for a company who is, in turn, contracting me to a multi-national.

    I've been putting away money for PAYE etc, but have just hit the threshold last month for VAT.

    Their/my contract with the multinational is due to expire in January, so there are two invoices to go (Dec & part of Jan). It's been mentioned that I may be extended until June & they may take me on full time then or extend again.

    Obviously, I need to be tax compliant, so can I:
    1. Just register for VAT (not a limited company)?
    2. If things don't work out or I get taken on full time, de-register?

    Separate questions
    1. What percentage should I be putting away for PAYE/PRSI/USC?
    2. Can I reduce my tax liability by putting some of this money I've been holding money into a pension?

    Yes...just register for VAT and charge 23% on any subsequent invoices (assuming the service you provide is Vatable at 23%).

    Yes...You can deregister if you cease trading or you commence employment.

    The percentage you need to put away for Income Tax/PRSI/USC is a bit more difficult and depends on a few things, but 25% should cover it. No harm if you put away too much. (On earnings of €40k with no expenses, a single person would pay around €10500(very ballpark!) but I'm assuming you have at least some expenses).
    Yes, you can reduce your liability by putting some into a pension but the amount is restricted based on your earnings and your age.

    It might be no harm for you to consult an accountant!


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