sole trader help tax

Setanta1234

Hi All

Looking to set up as sole trader in 2018 , maybe february and need some advice / help. The process seems easy...1. decide i want it to just be myself in business 2. Open seperate bank account and 3. register with revenue as sole trader. Its the tax process that i feel will be stressing me most.

Firstly i believe i will be making about 6,000 from jan to dec...i will be working as a tennis coach. I will be getting paid in cheque format ( i wont be invoicing anyone or billing anyone ) club or school asks me to do a period of work and i do the work and get paid in cheque , whether its club work or schools work, so how do i keep a record when paid by cheque , what is best way to keep records when im paid in cheque???

Do i just take a photocopy of cheque and attach a lodgement slip that i paid it into account

And i presume when i get the go ahead to start i start keeping records from the first payment after this ?

I have no real expenses also except for new tennis balls now and again

Also if i start in feb 2018..what is my timeline for paying the tax...its just seems so complicated...deadline is oct 31st but told to pay it in may or earlier 2019 ??? .. i really need some one to explain it to me like im a six year old bc its making me think twice about it

exaisle

Go see an accountant.

Advice received here is free...and is generally worth about the same as what you pay for it..

LincolnHawk

https://www.lawyer.ie/taxation/self-employed-sole-traders/

Some of the figures may be out of date so check latest from revenue, but its a good guide. Also try citizens information.ie.
Agree about talking to an accountant in theory but 6000 is so little money you might not want to pay an accountant

Synode

Setanta1234 wrote: »

Hi All

Looking to set up as sole trader in 2018 , maybe february and need some advice / help. The process seems easy...1. decide i want it to just be myself in business 2. Open seperate bank account and 3. register with revenue as sole trader. Its the tax process that i feel will be stressing me most.

Firstly i believe i will be making about 6,000 from jan to dec...i will be working as a tennis coach. I will be getting paid in cheque format ( i wont be invoicing anyone or billing anyone ) club or school asks me to do a period of work and i do the work and get paid in cheque , whether its club work or schools work, so how do i keep a record when paid by cheque , what is best way to keep records when im paid in cheque???

Do i just take a photocopy of cheque and attach a lodgement slip that i paid it into account

And i presume when i get the go ahead to start i start keeping records from the first payment after this ?

I have no real expenses also except for new tennis balls now and again

Also if i start in feb 2018..what is my timeline for paying the tax...its just seems so complicated...deadline is oct 31st but told to pay it in may or earlier 2019 ??? .. i really need some one to explain it to me like im a six year old bc its making me think twice about it

Create a spreadsheet and record all your receipts in it. Start in Feb 18 and run it on a calendar year basis. You won't have to file your 2018 tax return until Oct 2019. You'll pay what you owe them then along with any 2019 preliminary tax due.

I'd second going to an accountant if you're unsure about anything.

Mrs OBumble

If you are working for a club or a school, rather than for individual students, then their accounts person is likely to want an invoice from you, so they can prove to their auditor that the cheque was for something legitimate. You may not have met the person who will ask for the invoice as yet, but there will be someone.

Also, you will have expenses - possibly things that you pay yourself at the moment anywhere (eg club membership) - things which you are required to have in order to do the work. A racquet. Training costs. Professional association membership. Business cards. Your phone, so that the school/club can get in touch with you. An accountant can advise what you can claim - and the cost of an accountant is also an expense.

Important question: whose public liability insurance will your work be covered by? If it's the club's, then there must be some way for them to get their share of the cake (possibly another expense). If you have to provide your own, then it's another expense. You may think you don't need it - shure you're just doing some coaching - but what if someone who is related to a smart-ass lawyer breaks an ankle while being coached: they could make your life very difficult.

Setanta1234

Synode wrote: »

Create a spreadsheet and record all your receipts in it. Start in Feb 18 and run it on a calendar year basis. You won't have to file your 2018 tax return until Oct 2019. You'll pay what you owe them then along with any 2019 preliminary tax due.

I'd second going to an accountant if you're unsure about anything.

So Basically , all payments received, dated ( when I received them ) and time period I worked for that payment ( €480 received on mar 3rd, for work from Feb 20th to Mar 2nd ). evidence I received payment - will be getting paid in cheque mostly so photocopy of cheque maybe

What Expenses I had and what for and Receipts proving that purchase

and bank Lodgement slips and statements showing lodgements and withdrawals from bank account

is that about it ???

Setanta1234

so guys looking over some research, can anyone agree with this or am I close but in regards to my records ????

So Basically , all payments received, dated ( when I received them ) and time period I worked for that payment ( €480 received on mar 3rd, for work from Feb 20th to Mar 2nd ). evidence I received payment - will be getting paid in cheque mostly so photocopy of cheque maybe, or club signs something to say that they paid me for this amount ???

What Expenses I had and what for and Receipts proving that purchase ???

and bank Lodgement slips and statements showing lodgements and withdrawals from bank account ???

is that about it ???

Mrs OBumble

Thats pretty much the records you need you keep.

Someone ( you or an accountant) need to summarise them and do your yax return each year.

J.Ryan

If you are going to a location and providing labour only its quiet possible that you could be deemed an employee, although its more costly and requires more paperwork, you may be better off setting up a limited company to operate this business.

Setanta1234

J.Ryan wrote: »

If you are going to a location and providing labour only its quiet possible that you could be deemed an employee, although its more costly and requires more paperwork, you may be better off setting up a limited company to operate this business.

Hi JRyan..why would i be deemed an employee ??? A carpenter goes to a location and does a job...hes not an employee...just need clatification of your reply ?? Thanks

J.Ryan

Revenue have for years been looking at cases where people were working as contractors, but were in fact employee's.


The best examples I can give are locum Doctors and Pharmacists who use to be self employed and who are now employee's in each practice/pharmacy that they work in, due to a clampdown by Revenue a few years back.

There is a reason why any of the big companies who take on (for example) IT people as contractors do so, by hiring a company that the contractor owns or a service company that the contractor "buys" into rather than engaging them as a sole trader.

It would not effect you directly, but if the club/school you were invoicing had an audit, they would be hit by penalties on those payments to you. If I was accountant/adviser to any such body, I would advise them to only engage contractors as limited companies, to avoid this happening.

homingbird

@ 6k a year you would be paying more than you earn so i would keep it under the carpet.

Setanta1234

J.Ryan wrote: »

Revenue have for years been looking at cases where people were working as contractors, but were in fact employee's.


The best examples I can give are locum Doctors and Pharmacists who use to be self employed and who are now employee's in each practice/pharmacy that they work in, due to a clampdown by Revenue a few years back.

There is a reason why any of the big companies who take on (for example) IT people as contractors do so, by hiring a company that the contractor owns or a service company that the contractor "buys" into rather than engaging them as a sole trader.

It would not effect you directly, but if the club/school you were invoicing had an audit, they would be hit by penalties on those payments to you. If I was accountant/adviser to any such body, I would advise them to only engage contractors as limited companies, to avoid this happening.

You mean these guys have been moonlighting ??? Plus if the sole trader is registered and qualified why not just hire him...anywat im a tennis coach..i have to operate as self employed..maybe i dont get what you say

relax carry on

homingbird wrote: »

@ 6k a year you would be paying more than you earn so i would keep it under the carpet.

There's no such thing as more than a 100% tax rate. What are you on about?

If after expenses his additional taxable income is 6k and he's already in the higher rate, then that's income tax at 40%, PRSI at 4% and USC at either 4.75% or 8%.

Setanta1234

relax carry on wrote: »

There's no such thing as more than a 100% tax rate. What are you on about?

If after expenses his additional taxable income is 6k and he's already in the higher rate, then that's income tax at 40%, PRSI at 4% and USC at either 4.75% or 8%.

You telling me..if i register as a sole trader and potentially earn 6000 in first year if that...i will be taxed at 40% on that ???? Im.single..no dependants

relax carry on

Setanta1234 wrote: »

You telling me..if i register as a sole trader and potentially earn 6000 in first year if that...i will be taxed at 40% on that ???? Im.single..no dependants

Only if you have another source of income which has you at the higher rate already. If you have no other taxable sources of income, then it's just PRSI you'd be paying.

Setanta1234

relax carry on wrote: »

Only if you have another source of income which has you at the higher rate already. If you have no other taxable sources of income, then it's just PRSI you'd be paying.

What is the higher rate ?? How much do i need to earn to be at higher rate..total income ???

relax carry on

Setanta1234 wrote: »

What is the higher rate ?? How much do i need to earn to be at higher rate..total income ???

In 2018, the lower rate band is up to €34550. Anything above that is at the higher rate.

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

J.Ryan

Setanta1234 wrote: »

You mean these guys have been moonlighting ??? Plus if the sole trader is registered and qualified why not just hire him...anywat im a tennis coach..i have to operate as self employed..maybe i dont get what you say

Nope, they used to be self employed, now they have to be on PAYE as a result of Revenue Intervention.

It boils down to the interpretation of the nature of the service provided.

Setanta1234

relax carry on wrote: »

In 2018, the lower rate band is up to €34550. Anything above that is at the higher rate.

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

Well i sure wont be making that...no say...i might be on SW enterprise allowance where i get a percentage of SW payment for 2 years after i become a sole trader but i dont have to pay tax on that. SW Told me..i can only see myself making 6000 ( if that ) as a sole trader in year...so im at 20% on that ???

Setanta1234

J.Ryan wrote: »

Nope, they used to be self employed, now they have to be on PAYE as a result of Revenue Intervention.

It boils down to the interpretation of the nature of the service provided.

The nature of service provided is a tennis coach

Setanta1234

J.Ryan wrote: »

Nope, they used to be self employed, now they have to be on PAYE as a result of Revenue Intervention.

It boils down to the interpretation of the nature of the service provided.

So basically...practices and pharmacists were hiring in self employed doctors and pharmcists for a period..not officially hiring them but paying them ? Revenue said you have to make them full time

Mrs OBumble

Setanta1234 wrote: »

So basically...practices and pharmacists were hiring in self employed doctors and pharmcists for a period..not officially hiring them but paying them ? Revenue said you have to make them full time

No, Revenue said that they were really employees. typically part-time or fixed term employees. But still employees ... roughly speaking because they did the work on the premises on the pharmacy or medical practise, during hours specified by the pharmacy or medical practise, using equipment provided by the pharmacy or medical practise, according to professional standards set by the industry - but following local procedures for record-keeping etc that were set up by the pharmacy or medical practise.

Quite like you really: you will be working hours determined by the school or club, on their premises, using their courts, nets and floodlights ... and possibly their raquets too. There are no professional standards (not a registered profession). Recordkeeping, child-protection rules etc will all be determined by the club. It really does sound like you will be a temporary part-time employee. But likely the club doesn't want to do the administration behind this.

Setanta1234

Mrs OBumble wrote: »

No, Revenue said that they were really employees. typically part-time or fixed term employees. But still employees ... roughly speaking because they did the work on the premises on the pharmacy or medical practise, during hours specified by the pharmacy or medical practise, using equipment provided by the pharmacy or medical practise, according to professional standards set by the industry - but following local procedures for record-keeping etc that were set up by the pharmacy or medical practise.

Quite like you really: you will be working hours determined by the school or club, on their premises, using their courts, nets and floodlights ... and possibly their raquets too. There are no professional standards (not a registered profession). Recordkeeping, child-protection rules etc will all be determined by the club. It really does sound like you will be a temporary part-time employee. But likely the club doesn't want to do the administration behind this.

Is that still the case if i am only doing this part time at club. They are wanting my services..i know other coaches who work for themselves...work at other clubs and do schools..look after their own taxes. They independently hire me for 5 weeks ..i see what your saying but i am not working for the club i would be working for myself..THEY are wanting my service same as someone hires a carpender or plumber PLUS its a tennis club and not a business.. im a tennis coach..dont own my own club or courts. I do have my own rackets..balls and equipment. Where am.i supposed to do my work if not at a club or school ?

Mrs OBumble

Part time vs full time is irrelevant. It's still employment. You could be a part-time, temporary employee of several different clubs and schools at the same time.

Them not being a business is irrelevant, too: many charities and sports clubs have staff.

I do realise that tennis coaching is often done on a self-employment basis, and that this is how many clubs expect you to operate. But really they are pushing the boundaries of the law, when someone thinks about the nature of the relationship.