Can you cover running costs of website without registering as self-employed etc

grassylawn

Can I monetize my website to cover whole or partial running costs without registering as self-employed or declaring it as income?

For example say it displays ads that are taken down if revenue from them meets the running costs for a given month.

Gloomtastic!

I believe any sort of income must be declared for tax purposes. The fact you aren't making any profit is irrelevant.

You could have a look at non profit organisations (NPOs) and see if you tick any of the boxes......

https://www.irelandcompanyformation.com/open-a-non-profit-organization-in-ireland

FionMc

Yes, you can set it up as a limited company. then your company only pays corporate tax on profits. But there are no profits, still you'll need to file a tax return though, but you wont be declaring anything as income unless the LTD pays you, which it wont. Your LTD can earn a million quid and bucket loads of profits, but still not pay you a penny and thats perfectly legit. So you wont need to declare as self employed either. LTD is a separate legal entity to you.

MouseMan01

I'm registered as a sole trader and according to my accountant, you need to register as self-employed if you are making in the region of 5000€ profit a year.

relevanc

FionMc wrote: »

Yes, you can set it up as a limited company. then your company only pays corporate tax on profits. But there are no profits, still you'll need to file a tax return though, but you wont be declaring anything as income unless the LTD pays you, which it wont. Your LTD can earn a million quid and bucket loads of profits, but still not pay you a penny and thats perfectly legit. So you wont need to declare as self employed either. LTD is a separate legal entity to you.

If you are a director of a company you have to file a tax return regardless.
Setting up a company carries responsibility in terms of filing to revenue and CRO. And unless you are skilled in this area, it will cost money to engage an accountant.
If you hold onto profits by choosing to not making a distribution, then the company will have to pay a close company surcharge in addition to corporation tax

FionMc

relevanc wrote: »

If you are a director of a company you have to file a tax return regardless.
Setting up a company carries responsibility in terms of filing to revenue and CRO. And unless you are skilled in this area, it will cost money to engage an accountant.
If you hold onto profits by choosing to not making a distribution, then the company will have to pay a close company surcharge in addition to corporation tax

I think OP wont hold onto profits because he's spending all the profits on running the business rending both corp tax and surcharge at 0. Agreed he'll have to pay accounting though but that's the only cost we'd neeed to worry about.

Random question: if his business was not registered in ireland but only controlled/operated from Ireland, would that close company surcharge apply still to any profit he did make? The surcharge is an Irish thing, so I wonder if operating a US LLC would bypass the surcharge if he was actually making profits?

grassylawn

Is there any need to engage an accountant for very simple returns involving small amounts of money? Ideally I would be looking to scale up later.

Gloomtastic!

grassylawn wrote: »

Is there any need to engage an accountant for very simple returns involving small amounts of money? Ideally I would be looking to scale up later.

For the first year returns, I'd say yes, get them to fill out the on-line return on ros.ie. Then next year, just replace the figures with the new ones yourself. I've been doing this for years now and although the form does change slightly every year, it's still pretty comprehensive.

Some of the better accounts packages can also file end of year returns I believe. You might want to check them out. I just use a spreadsheet for my accounts because it's free/quicker/perfectly suited to my businesses. Here's a link to the spreadsheet templates I use.......

https://www.dropbox.com/scl/fi/gfbrx9l1vqnjxaoelpbfe/Accounts-Template-with-VAT.xls?dl=0&rlkey=b6hm8vkvs9zr83c2aakmuvltv

pinkypinky

Getting an accountant to do this level of work is small money if you keep good records for them to use. It'll be worth the money to know it's done right, the ability to ask for advice & it's a legitimate business expense to put against tax.

RedXIV

pinkypinky wrote: »

Getting an accountant to do this level of work is small money if you keep good records for them to use. It'll be worth the money to know it's done right, the ability to ask for advice & it's a legitimate business expense to put against tax.

Sorry to hijack this, but for people who are looking to start up, is this a case of just looking for "accountants for startups" on google and picking at random? Or would you recommend looking for local guys?

Like OP, I'm looking at an online service thats not going to make very much money but from experience I just want someone to do the heavy lifting to get me compliant (especially as I've a mortgage application coming up )

Gloomtastic!

RedXIV wrote: »

Sorry to hijack this, but for people who are looking to start up, is this a case of just looking for "accountants for startups" on google and picking at random? Or would you recommend looking for local guys?

Like OP, I'm looking at an online service thats not going to make very much money but from experience I just want someone to do the heavy lifting to get me compliant (especially as I've a mortgage application coming up )

Prior to doing my own tax returns, I worked with loads of different auditors/accountants, from big boys like Baker Tilly to one man operations and I can safely say, I never met an accountant that didn't disappoint.

In my opinion, no two accountants will ever give the same answer to a question. One will say it's fine to do something, another will say you can't do that. So, I would say talk to three accountants, initial conversations should always be free.

Talk about you and your business, are you a risk taker or are you always looking to be safe. How each accountant reacts to you should determine whether you will be able to work with these people going forward.

Are you going to do the day to day bookkeeping/invoicing/credit control yourself or are you going to employ someone to do them? Do you want your accountant to do it? How much are they going to charge you to carry out these services and is it cheaper to employ someone part-time/full-time instead?

As a sole trader, I can tell you it takes about 20 minutes to file your year-end tax return. How much are your accountants going to charge you for that? I used to pay €400 + VAT (about €500). Are they worth the money? Not a chance!

So, thread carefully and always get a quote before asking them to do anything.

Good luck!

RedXIV

Gloomtastic! wrote: »

As a sole trader, I can tell you it takes about 20 minutes to file your year-end tax return. How much are your accountants going to charge you for that? I used to pay €400 + VAT (about €500). Are they worth the money? Not a chance!

So, thread carefully and always get a quote before asking them to do anything.

Good luck!

I think you've the right idea from the post above:

For the first year returns, I'd say yes, get them to fill out the on-line return on ros.ie. Then next year, just replace the figures with the new ones yourself.

I think if I got the template to work with, it's unlikely it will change much. Will take a look at some of the locals and see what they say.

Cheers!

Mrs OBumble

All this talk of registering companys is way off beam. The OP is asking about registering as self-employed, which is simply registering as a sole-trader with Revenue and perhaps registering a trading name with the CRO (E20, a once off transaction, totally possible to DIY).

The answer is: If profit (= total income minus costs) is less than €5000 per year, then you don't have to register as self-employed. Instead, you just use a Form 12 on MyAccount on the Revenue website to report the profit.

pinkypinky wrote: »

Getting an accountant to do this level of work is small money if you keep good records for them to use. It'll be worth the money to know it's done right, the ability to ask for advice & it's a legitimate business expense to put against tax.

It's not small money, if all you are looking at is enough to cover the cost of running the website: Basic website hosting is perhaps €200 per year. I've never heard of an accountant wanting less than €400 per year.

If you want to cover the cost of developing a fancier website, that's a whole different issue. You won't necessarily be able to copy Year 1 figures for Year 2's tax return, either, because (presumably) the development costs will be mostly in Year 1.

But if you're not looking to cover development costs, then the only wild-card is the amount of advertising revenue you get. If you have Google Adsense (by far the easiest way to do ads), and your website gets insanely popular, and is in a niche which makes good money on Adsense (some are far, far better than others), then you could find yourself with a lot of profit, ie well over 5k. In this case, an accountant (one who understands the business model) is definitely a good idea.

But if your traffic or ad-revenue is low, then an accountant is not needed.

If you want to avoid the risk of high advertising revenue, then one option is to sell advertising space directly to interested parties. Eg if 5 people pay $40 to show an ad on your website for 37 days, then you've made €200 revenue. If website hosting costs you €201, then you've made a loss of €1 for the year. No need to report anything.

But whatever you do, do keep good records so that if Revenue happen to audit you, you can easily show what happened.