Sole trader taxes

spalpeen

Hi,

I'm working as a sole trader and am aware I have to submit a self assessment. Until this time, do I have to 'register' anywhere? I'm already on my account with revenue from my old paye job

Furze99

https://www.boards.ie/discussion/2058290589/sole-trader-taxes

You'll be filling in a Form 11 when you make a tax return. You should set up a ROS account where you can file this and other documents as time goes on. When you're doing this, use the MyEnquiries service/ contact form etc to clarify your situation.

Form 11 does require breakdown figures to be submitted - no harm to download a blank and look through. As it covers multiple situations, it looks a bit daunting at first but large parts can be ignored in many cases as not relevant. But you need to figure these out.

Can't stress enough the importance of good basic book keeping - your income and expenses etc. Do it every month at least and don't put it on the long finger. Get into the habit. You'll need the figures from this at the end of your taxable period to figure out your taxable income and fill in various figures on Form 11. And don't forget Preliminary Tax.

Good luck with it.

spalpeen

https://www.boards.ie/discussion/comment/120425577#Comment_120425577

Thanks, I did not know about preliminary tax.

I started as a sole trader last year in november and so earned very little as I only worked for 2 months. I presume that in this case I won't need to pay preliminary tax?

Furze99

https://www.boards.ie/discussion/comment/120426913#Comment_120426913

That would relate to return for 2022. Depends on what you set your 'tax year' to be, for convenience I and I'd imagine most use the calendar year 1st Jan to 31st Dec. If doing that, you'll need to declare this income in relation to 2022. Which needs to be done before Oct this year.

When you are making this 2022 return, you'll also be asked to guesstimate your taxable income for 2023 and pay what tax is calculated on this by 31st Oct. This is called Preliminary Tax and is a kind of pay before you earn as you won't truly know your Oct/Nov/Dec income at that stage. However the following year, this all comes out in the wash - if you've overpaid then it's offset against new liability and if underpaid, it's added on.

Go to www.ros.ie if you haven't already and set up an account.

Most sole traders will also pay into a pension scheme, think PRSA or similar. Remember you can use this to reduce your tax liability in the higher tax rate, check the rules as to how much you can put in. Eventually when you retire, you get this money back. Some is tax free and on balance you pay whatever tax is due then but you will hope that will mostly be at the lower rate then. It's pretty much a no brainer as things stand for most sole traders/ self employed.

spalpeen

https://www.boards.ie/discussion/comment/120427168#Comment_120427168

Thanks that's very helpful. I must look into the pension thing although I admit my first priority is getting a house