Working as Freelancer with working full time

sashab

Since I'm here only three years and don't understand everything but want to work everything legally, so if someone can help me with this. I have tried with revenue but because of COVID-19 it's impossible to get to the support.

So I'm working as full time for company in Dublin, getting my salary, pension, medical and everything. But I would like to start working as Freelancer in my free time and do website, applications and games for people.

I'm not planing earn much, probably between €100-€400 a month max. What are my steps for this? I would probably sell only my service and will work from my home. What do I need to register and do I even need to do anything? Also is this even worth it at all? Thank you.

Kind Regards,

Mooooo

Talk to an accountant when you have a definite idea of what you will be doing. I'd imagine you'd set yourself up as a sole trader and any income from the freelance work, minus your costs, will be taxed at a rate depending on your paye work. If your day job has you into the high rate and your costs aren't that high for the freelance work I'd imagine a lot of what you earn would be taxed at the higher rate. Looking at putting it into a pension or something may be a way to mitigate it. Again a chat with an accountant would be the best bet

dennyk

Definitely check with an accountant. If you're really earning that little (especially if that's gross earnings), it may be fairly simple, though; that's well under the threshold at which you'd have to register for VAT and, assuming you don't have any other non-PAYE income, may well be under the threshold which would make you a chargeable person and require you to file a full tax return and pay preliminary tax. Still, it'd be helpful to have professional advice to make sure you're fully compliant, and so that you're aware of the path forward if your business grows in the future.

Mrs OBumble

As a freelancer, it's likely that you won't have many deductible expenses - perhaps phone/broadband, perhaps a portion of your electricity/gas bills, perhaps some on-line advertising or subscription costs, perhaps website costs. It depends what you do, though, eg if you're a beauty therapist / hairdresser etc you'll likely have more materials to claim.

If you're getting revenue of 100-400 per month, that's only 1200-4800 per year.

So your maximum tax bill for the year would be 50% of that, say 600-2400 per year (or less if your day job salary is less than 35k) - and that's if you don't deduct any expenses. It's lower if you deduct expenses.

Get a quote from an accountant or two. But there's no point paying them €400 for advice if your tax bill is only 600: they are only worth it if their advice can reduce your tax bill by more than their fee (or if you really want to push the boundaries about what deductions can be claimed).


What you need to do is:
If your profit (ie revenue minus expenses) is less than €5000 for the year, just declare it as extra income via MyAccount.
If it's more than that, register as a sole-trader with Revenue.

Keep an eye on your revenue (ie the cash you take in) going forward: if there's any chance of it going about €37,000, you need to recognise this early on, and set things up properly for VAT. This is where an accountant's advice is invaluable. But make sure you get one who understands they type of business you are in (eg an accountant who specialises in pubs/hospitality businesses may not be up to date with the details around software development or drop-ship product sales and design).

Calahonda52

sashab wrote: »

Since I'm here only three years and don't understand everything but want to work everything legally, so if someone can help me with this. I have tried with revenue but because of COVID-19 it's impossible to get to the support.

So I'm working as full time for company in Dublin, getting my salary, pension, medical and everything. But I would like to start working as Freelancer in my free time and do website, applications and games for people.

I'm not planing earn much, probably between €100-€400 a month max. What are my steps for this? I would probably sell only my service and will work from my home. What do I need to register and do I even need to do anything? Also is this even worth it at all? Thank you.

Kind Regards,

Just for your information, being new here: thats not the role of Revenue, '19 or no '19

To begin with I would just start work and as noted above, while income is less that 5k then deal with it in My account, just put enough aside every month for tax.
Just see how it goes for now, we are now in April, will you hit 5k by Dec?
.
VAT is something you need to consider, not just from the threshold perspective but from a pricing perspective.
If you and all your clients are registered for VAT, then no problem.
However, if you initially don't charge VAT, at 23% and then hit the threshold of 37,000, then your price to non vat registered customers will go up by 23%.
.

IIRC you CANNOT charge VAT without being registered.
Good luck!

sashab

So I contact about 10 accountants, and all of them requested €700 and more just for advice :S Below is my story, I'm earning at my full time job €55k, my wife is earning about €20k, and with this "freelance" job I would earn only about as said €100-€400 a month MAX. There is no expense for this, no phones, internet, software, equipment or anything else.

Can I just continue to design web sites for this and then just declare it as extra income via MyAccount on my end of year tax return? Since I'm 100% not planing go more than €5k/year in extra income for this.

I would appreciate if someone can answer for sure about this since I already have a client who is waiting for me to start work but I don't know how to charge him (invoice) until get this info. And revenue can't help me until all this is over with COVID-19. Thank you.

relax carry on

sashab wrote: »

So I contact about 10 accountants, and all of them requested €700 and more just for advice :S Below is my story, I'm earning at my full time job €55k, my wife is earning about €20k, and with this "freelance" job I would earn only about as said €100-€400 a month MAX. There is no expense for this, no phones, internet, software, equipment or anything else.

Can I just continue to design web sites for this and then just declare it as extra income via MyAccount on my end of year tax return? Since I'm 100% not planing go more than €5k/year in extra income for this.

I would appreciate if someone can answer for sure about this since I already have a client who is waiting for me to start work but I don't know how to charge him (invoice) until get this info. And revenue can't help me until all this is over with COVID-19. Thank you.

If your additional non PAYE income is under €5000 (after any allowable expenses) for the full tax year (January to December) you just declare it in your annual tax return via Myaccount the following year. You do not need to register for Income Tax and file form 11 tax returns. Just keep good original records of your income and expenses.

https://www.revenue.ie/en/additional-incomes/is-your-extra-income-taxable/index.aspx

sashab

relax carry on wrote: »

If your additional non PAYE income is under €5000 (after any allowable expenses) for the full tax year (January to December) you just declare it in your annual tax return via Myaccount the following year. You do not need to register for Income Tax and file form 11 tax returns. Just keep good original records of your income and expenses.

https://www.revenue.ie/en/additional-incomes/is-your-extra-income-taxable/index.aspx

Thanks, can you just tell me how much rate of tax I would pay for this extra income? So I know to put at side? For example if I declare €4500 as extra at the end of year as freelancer, how much % of tax I need to pay for that? Just to be sure. Thanks

Rulmeq

sashab wrote: »

Thanks, can you just tell me how much rate of tax I would pay for this extra income? So I know to put at side? For example if I declare €4500 as extra at the end of year as freelancer, how much % of tax I need to pay for that? Just to be sure. Thanks

If you're earning 55k in a PAYE job, then you will have to assume that you will be paying the top rate on any additional earnings (40% PAYE, 8% USC, 4% PRSI - If you earn over 100K I think there might be an extra bit of USC to pay, but that might have been gotten rid of)

Ciaran

Rulmeq wrote: »

If you're earning 55k in a PAYE job, then you will have to assume that you will be paying the top rate on any additional earnings (40% PAYE, 8% USC, 4% PRSI - If you earn over 100K I think there might be an extra bit of USC to pay, but that might have been gotten rid of)

4.5% USC for under 70k. 48.5% total tax.