Additional income while working full time

Yurple

Hi all,

Does anybody know the best way forward for the following situation I'm in?

I work full-time and get a good salary. I am paying tax at the higher rate.

I have two websites that make on average around 400 - 600 per month additional income but are currently growing and starting to look more like 600 to 800 per month.

I have expenses for the website but I am not a business so I pay everything out of my current account and just take a big hit on the expenses and add the the income on revenue.ie.

Last year the most money these websites made was around 30 per month (MAX) which was nice but now both websites are growing month over month and need advice if I should start a company? Is it possible while being employed full time?

The main reason is to add expenses to reduce the income tax...

Anyone have any experience with this?

If you earn less than €5,000 net income in yje calendar year then declare it in a tax return (via MyAccount at www.revenue.ie)

If you earn over €5,000 net you can register as a sole trader for this side income. Allowable expenses can be deducted from your income irrespective of whether you are a sole trader or a limited company.

Also just noticed you saying you take a hit on the expenses. If the expenses relate to the business (e.g. hosting fees, domain name registration) you can deduct these from your income and pay income tax on the remainder.

Mrs OBumble

I am pretty similar.

Keep a spreadsheet of income and expenditure. Prepare a summary at the end of the year.

Form 11 makes things easy because it asks for profit and expenditure in certain category.

If you grow a lot, keep an eye out for VAT thresholds. The lowest is currently 37k I think. If there's any chance you'll get near them, consult an accountant qjo understand online earning models. Apart from that its simply enough to manage tax as a sole trader.

Where you might register a company is if there's any chance you might get sued or make a loss, so want to limit your liability. You need to think about the risks attached to your specific niche for this.

https://www.boards.ie/discussion/comment/119161517#Comment_119161517

€37,500 threshold in a continuous 12 month period for VAT where services are provided.

Not sure why a company is required if loss making?

Yurple

Thank you both so much for the reply.

I didn't know it was this simple. In my head it was really complicated since I work full time and I am not a business.

I also have a spreadsheet and every cent is accounted for but I didn't know I could deduct expenses without being set up as at least a sole trader?

Can I simply use my spreadsheet and only report the net income at the end of the year? and keep the records of everything in case they do an audit?

Or can this only be done if I am a sole trader/company?

https://www.boards.ie/discussion/comment/119161564#Comment_119161564

Super simple when below €5k net income, pretty straightforward if above but if you're unsure on any of it do seek out professional assistance (which shouldn't cost too much based on the numbers you're talking about).

If you set up a limited company you have to file a Corporation Tax return, income tax return and an annual return (B1) to the CRO - so 3 pieces of compliance instead of 1 as a sole trader (income tax return). Ltd Co will cost you a lot more.

Keep a spreadsheet, record the income and expenses related to the business, keep your receipts/invoices, and best of luck with it.

Yurple

Thanks so much! I am definitely above the 5000 so will research that and do it properly! thanks a lot

Pawwed Rig

What is the scope for the websites in the future? If there is a potential high upside you might consider talking to a tax guy about whether or not it would be better to have them in a company rather than in your own name. Loads of good reasons to do this for something that will increase a lot in value