Having to go sole trader-implications?

Nameloc

So my boss who resides in Spain set up the business 2 years ago when he hired me. At that point I was PAYE.

He's had a look at everything and feels the money being saved on corp tax is wiped out by the accountant fees. So he has decided to close down the Irish business and incorporate in Spain where the tax is a little more but accountancy fees are much less.

This has left me in the position of having to go contractor as a sole trader. My annual salary was/is just shy of the higher level of tax.

I get that its relatively simple in terms of wait until October and pay the tax for the year previous. And for every month, invoice him for that amount.

But looking into this, I still have a few questions.

It says that I would also have to pay 90% of the expected tax for the rest of the year in October?

Where my annual tax credits were just over 3k, am I right in seeing that the max credits I can get is now 1650?

Do I need to have a separate bank account for this?

My wife is pushing for me to hire an accountant, but given I'm not exactly sure the expense is worth it.

K.Flyer

I would suggest that you speak with an accountant as well. There are certain rules about being self employed when you are only doing / able to work for one entity. And probably more again if that company is located outside of Ireland.

Mrs OBumble

He needs to increase your salary to cover the cost of public liability insurance, employer PRSI, annual leave and public holidays, at very least. (He's paying for all these now, but won't be when you're self employed.) Should be providing you with some training too, and likely compulsory sick leave sometime in the future.

In rough terms, I'd expect the invoiced total as a contractor to be about twice your wage as an employee.

Which means there may be VAT implications too. Unless you understand these, definitely get an accountant's advice.

Is there a business premises? If not, where is company owned equipment stored? If it's at your house, is it insured? How is it, and materials for work going to be purchased?