Corporation tax on side hustle businesd

kdowling · 26-05-2023 09:38AM #1

I have a full time PAYE job and I have a side business that turns over €500,000 with a net profit of €100,000

I don’t take a wage as I don’t really need to and my plan is to build up the company over the next few years and sell it on.

my question is, as I don’t take a wage the net profit is higher and is obviously subject to corporation tax.

is there any way this can be done where I can reduce my corporation tax liability without taking a wage?

retalivity · 26-05-2023 09:43AM

Pension the profit?

afatbollix · 26-05-2023 10:04AM

Pension, Company cars & more expenses is the only way to get it down.

ahnowbrowncow · 26-05-2023 10:16AM

https://www.boards.ie/discussion/comment/120642085#Comment_120642085

Surely a company car is not very tax efficient when you'll have to pay BIK on it.

afatbollix · 26-05-2023 10:24AM

Electric cars have better BIK. I'm unsure of the exact rates but you can ask your accountant.

ELM327 · 26-05-2023 10:28AM

If you can create expenses this the best way of getting cash out of a business to reduce tax liability. Pension contributions are the next best

Peregrinus · 26-05-2023 10:49AM

https://www.boards.ie/discussion/comment/120642137#Comment_120642137

Cars in general are not very tax efficient as cars themselves are taxed quite heavily, and do not hold their value well. Buying a heavily taxed wasting asset as a mechanism for reducing your tax bill is . . . perverse.

Mrs OBumble · 26-05-2023 12:04PM

With that level of profit, you can afford to buy proper tax-planning and succession planning advice. And you should do that.

Mick Tator · 26-05-2023 12:17PM

So if your side hustle is making more than €100k p.a., your PAYE job must be making you considerably more (else why that hassle?). That means your annual income could be more than €200k. To minimise tax and take cash out of the company you could easily afford to contribute the maximum to a pension plan. The total permitted is capped by allowable salary limit (€115k) and age related -

The age-related percentage limits are:

Up to 30 years 15% of remuneration/net relevant earnings

30 – 39 years 20%

40 – 49 years 25%

50 – 54 years 30%

55 – 59 years 35%

60 years + 40%

With that amount of income why not use a professional instead of using Boards?

Corporation tax on side hustle businesd

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