Setting up PAYE for Self Employed

Old Gill

Hi, I'm not sure whether this is possible/allowed. I'm Self employed but looking to pay myself a wage via PAYE. The reason being I'm looking to get a mortgage and my last 2 years returns have not been great but I expect to do much better over the next year. The bank accept the last 6 months PAYE but last 3 years Form 11's (average) so if the income was put through as PAYE I'd be in a much stronger position.

If I started it now do I pay the tax every month or does it get paid in a lump sum at the end? How much would a bookkeeper charge (I'm a driving instructor so there is just income, petrol, car loan) to create the payslips and deductions etc?

Any advice much appreciated.

Squatter

Old Gill wrote: »

Hi, I'm not sure whether this is possible/allowed. I'm Self employed but looking to pay myself a wage via PAYE. The reason being I'm looking to get a mortgage and my last 2 years returns have not been great but I expect to do much better over the next year. The bank accept the last 6 months PAYE but last 3 years Form 11's (average) so if the income was put through as PAYE I'd be in a much stronger position.

If I started it now do I pay the tax every month or does it get paid in a lump sum at the end? How much would a bookkeeper charge (I'm a driving instructor so there is just income, petrol, car loan) to create the payslips and deductions etc?

Any advice much appreciated.

The simple answer is that it can't be done.

In order to pay PAYE you must be an employee and as you can't become your own employee, you can't enter the PAYE system.

amtc

Well actually you can. You can set up an umbrella company through one of the contracting agencies and pay yourself through that. I did this for the last couple of years as wanted to keep my paye status. I used contracting plus.

Oral Surgeon

You would need to set up a company and then be an employee of that company....
all is not as great as you’d think though....
This would mean the cost of setting up the company, not much
Extra accounting costs every year as now you will need to submit company accounts as well as having your wages worked out by your employer (you)!
Instead of paying 4% prsi at the end of the year for yourself, you will now pay that and an additional 10% employers prsi....
Wages can be weekly fortnightly or monthly, you can not dip your hand into the company money apart from that if you are stuck for a few quid.
Taxes on your wages are paid from the company every 3 months.
What’s left in the company account at the end of the year is subject to 12.5% tax...
Last and finally, if your self employed accounts don’t look great then I don’t see how you can pay yourself a bigger wage and keep the company viable, you can’t invent money by going from self employed to paye....

Old Gill wrote: »

Hi, I'm not sure whether this is possible/allowed. I'm Self employed but looking to pay myself a wage via PAYE. The reason being I'm looking to get a mortgage and my last 2 years returns have not been great but I expect to do much better over the next year. The bank accept the last 6 months PAYE but last 3 years Form 11's (average) so if the income was put through as PAYE I'd be in a much stronger position.

If I started it now do I pay the tax every month or does it get paid in a lump sum at the end? How much would a bookkeeper charge (I'm a driving instructor so there is just income, petrol, car loan) to create the payslips and deductions etc?

Any advice much appreciated.

HcksawJimDuggan

Oral Surgeon wrote: »

Instead of paying 4% prsi at the end of the year for yourself, you will now pay that and an additional 10% employers prsi.....

Assuming they are a proprietary director of the company, they will not be liable to 10% employers PRSI. They will be chargeable to PRSI under class S.

Oral Surgeon

HcksawJimDuggan wrote: »

Assuming they are a proprietary director of the company, they will not be liable to 10% employers PRSI. They will be chargeable to PRSI under class S.

You are right, this explains it well (for the op)
https://businessbuddy.ie/2016/04/08/company-director-tax/

Squatter

amtc wrote: »

Well actually you can. You can set up an umbrella company through one of the contracting agencies and pay yourself through that. I did this for the last couple of years as wanted to keep my paye status. I used contracting plus.

Agreed.

However, I still prefer my simple answer - for the reasons outlined in Oral Surgeon's reply!

CIARAN_BOYLE

HcksawJimDuggan wrote: »

Assuming they are a proprietary director of the company, they will not be liable to 10% employers PRSI. They will be chargeable to PRSI under class S.

Assuming you are a propietry director of a company the banks will request 3 years accounts of the company.

This would leave the op in the same situation he started with.

Old Gill

Thanks everyone, it's a bit more complicated than I expected.

I noticed while doing the returns on ROS that income from a lodger is tax exempt. If I took say €6k from a lodger this year would that be added to my income in the notice of assessment? Or as it's tax exempt would it just be ignored?

Deckyalrite

Old Gill wrote: »

Thanks everyone, it's a bit more complicated than I expected.

I noticed while doing the returns on ROS that income from a lodger is tax exempt. If I took say €6k from a lodger this year would that be added to my income in the notice of assessment? Or as it's tax exempt would it just be ignored?

I can confirm that "Rent a Room" income is ignored when under the annual exemption of 14K.

Oral Surgeon

Old Gill wrote: »

Thanks everyone, it's a bit more complicated than I expected.

I noticed while doing the returns on ROS that income from a lodger is tax exempt. If I took say €6k from a lodger this year would that be added to my income in the notice of assessment? Or as it's tax exempt would it just be ignored?

Is this 6k rents room money something that you are actually receiving now or something that you hope to get if the bank give you the mortgage??