Registering as a Sole Trader

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A sole trader is the simplest form of business in Ireland. As the name implies, it refers to one individual who owns and operates a business. A sole trader can have employees to assist with the running of the business, but it is the sole trader who owns the business, taking all the risks and rewards.

To register as a sole trader you will need to complete a Form TR1 (available on www.revenue.ie), sign it and send it to your local Revenue District Office.

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Form TR1 allows you to register for different taxes:

  • Income tax: Income Tax returns are due each 31 October (although there is usually an extension to mid November if you pay and file online).
  • VAT: You will need to register for VAT if you have a VATable activity and if you are over the annual sales threshold – €37,500 (in the case of supply of services) and €75,000 (in the case of supply of goods).
  • PAYE/PRSI: If your business will employ staff (other than yourself), complete part D.
  • RCT: This is for Construction, Forestry and Meat Processing industry only

Some tips on completing the form:

  • Leave Part A2 blank – this is for partnerships and trusts
  • In the “Capacity” box, write “Individual”
  • Q21: Put details of your rented business premises here. If you work from home, this is generally left blank.
  • Q30: This is for Developer/Landlords only
  • One of the most frequent questions I get asked is what date will the accounts be made up to (no.17 on the form). You can decide what date your accounts will be done up to every year. For example, if you started your business on 1 June 2010, then your first set of accounts could be to 31 May 2011. Or you could make your first “year” end 31 December 2010, so that every year your accounts are done from January to December.
  • If you are trading under a name other than your own, you will need to register a business name.

When you are happy with the information in the form, sign and date the end of page 1. Remember to photocopy the form before you send it to your local Revenue District Office. 

Over the next couple of weeks I will have further Start your own Business posts – Registering for VAT, Registering as a Company, What you need on your headed stationery etc. To get free notification of new posts, click on email updates or RSS updates in the sidebar.

NEXT STEP:

If you have any queries, please feel free to leave a comment or email me on blog@parfreymurphy.ie

Updated: 28/04/10

392 thoughts on “Registering as a Sole Trader

    • Hi Denis,

      Thanks for the comment. Your business name number can indeed be the same as another unrelated company number. The numbers for each register are allocated in sequence. At the moment the last business name registered has the number 411419 and the last company registered 483894. As you probably know, you can do a business number and company number search on http://www.cro.ie.

      Best regards,

      Seamus

  1. can you adopt a business register number for example, if a company number is registered 682122 can a new business take that number 682122

  2. Hi Orla
    I am a sole trader and work in the interiors industry, our turnover has significantly dropped, to a point that a revenue official I have been dealing said about deregistering the company. what implication doe this have. can I still trade under my current business name and not charge or claim vat? Or does deregistering mean that the business completely ceases to trade. If so can I register another company name as sole trader and not charge or claim VAT as long as I stay under threshold.

    regards
    SL

    • Hi Sarah Louise,

      Thank you very much for the comment.

      If the turnover of your business falls below certain levels then you can cancel your VAT registration. The general thresholds are €37,500 for service businesses and €75,000 for businesses supplying products. (Further details of the VAT thresholds can be found here.)

      Once you are sure that your turnover levels are below the threshold and will remain there, then you can complete the necessary sections of Form TRCN1 and send it to your local Revenue office.

      If you do cancel your VAT registration, then you can trade as usual and you will still have the same number for income tax purposes and you can keep your business name. However, you can no longer charge VAT on your sales or reclaim VAT on your purchases.

      Have a look at my post on cancelling VAT registration for some potential pitfalls.

      Best regards,
      Seamus

      PS: Although you mention “company” in your message, I have assumed that you are a sole trader with a registered business name.

  3. Hi Denis,

    I’m a graphic designer and I’d like to register as a sole trader. I’m currently travelling quite a bit and I’m planning to do my work while being abroad for extended periods of time. The downside of all this mobility is that I don’t have a current Irish address that I could use in the registration process. I’ve found some companies providing virtual office setup services, is it legal to use such an address for the purpose of registering for tax and a business name (and possibly VAT)?

    Also do you know of any good companies that provide registration services like that for a fee? There’s plenty of them online but it’s difficult to choose the right one, especially from quite far away.

    I’ll be grateful for any help on this,
    Thanks

    • Hi Luke,

      In order to register for tax purposes in Ireland you must first be Irish tax resident. In general, an individual is Irish tax resident if he / she spends 183 days in Ireland in a tax year or 280 days in aggregate in that tax year and the preceding tax year. Other factors that need to be taken into account are your ordinarily residence and domicile status which may also have a bearing on your case. The rules on Irish residency can be quite complex so I would need a better idea of your Irish residence status for the last 3 years and your plans for the coming 12 months to be able to give you more accurate information.

      From my experience with the Irish Revenue Commissioners they may not process a client’s VAT registration where a virtual office address is being used as it may indicate that the individual does not have a permanent establishment in Ireland.

      If you wish to proceed with registering for Irish tax purposes I would be more than happy to assist you as this is one of the many services which we provide.

      Best regards,

      Seamus

  4. Hi Orla,

    I am thinking of helping my friends who are thinking of starting research on potential prospects, who might become clients in Ireland. For the purpose of printing brochures and namecards, is it required for us (each individuals) to register for income tax purpose as we do not have any quarantee that there will be any income at all, we just want to see if prospects will be interesed in our artist work or not, this project we plan to perform for six month starting in September ’10.

    Second question is similar to above, if I offer my voluntary help to distribute the brochures and namecards free of charge, in case if name cards will contain my own name having in mind language barrier. Do I have to register for income tax or do my friends have to engage me under any contract. Will my friens by liable to any taxes? I add that I will not take any income from friends as this will be my voluntary help offered to them to perform this research.

    I’ll be thankfull for help on this.

    Best Regards,

    Michael

  5. hi Orla,

    can i start up a sole trader business and work as eployee in another company at the same time?

    i’m planning to oopen my own business but i wouldn’t leave my job!

    Kind regards,

    Matteo

  6. Hi Orla,

    my girlfriend is thinking of opening up her own beauty salon, she has been trained & worked in beauty for the last 5 year’s & was made redundant in Dec 2009, ive a few questions if you wouldnt mind looking at.

    1 Which is better (more affordable) setting up as a sole trader or limited company (there wil be very little debt involved in the company)

    2 ive looked at a page on the dept of social welfare where it states that a person who has been unemployed for a term can avail of full social welfare benifit for the first 12 months of the business. Is this easy to facilitate & what happens with compnay profits or any income she takes formt he business?

    Thanks & sorry for the lenght of the mail
    Barry

  7. Hi Orla,

    as I’ve written on the previous post, I’m planning to start up my own sole trader business without leaving my job.
    AS i already know that i meant to be made redundant next year, can i start the business now and claim the Back to Work Enterprise Allowance (or the Short Term Back Enterprise Allowance)when I’ll be made redundant?

    Thanks,
    Matteo

  8. Hi, is there any minimum tax that has to be payed per year ?
    Is that true that if you’re self employed you’re not eligible for certain social welfare benefits, as Family Income Supplement ?

    • Hi Jurga,

      There is no minimum income tax to be paid per year but there is a minimum PRSI for self-employed people (class S) that much be paid each year – €253.

      A summary of the differences in social welfare entitlements for self employed individuals (class S) and those on other classes can be found here. As you can see self-employed people get far fewer benefits than Class A (employees). Reform of the PRSI system is one of the issues being discussed ahead of the next budget, so it is possible that there may be changes to this system in the near future.

      Regarding Family Income Supplement, you will not qualify if you are only self-employed, you (or your partner) must be an employee to qualify. More information can be found here.

      If you have any other queries, please let me know.

      Best regards,

      Seamus

  9. Hi Orla ,
    I im doing my tax returns at the moment, this is my first year as a sole trader on the back to work enterprise allowance. I started my business the middle of last year. I was just wondering is loan parents or back to work allowance taxed???

    • Hi,

      Thanks for the comment.

      * Lone parent payments are taxable
      * Back to work allowance payments and back to work enterprise allowance payments are not taxable

      Lone parents payments and the back to work (enterprise) allowances are not subject to PRSI.

      For other readers with similar questions, there is a useful table on the Citizen’s Information site which outlines which Social Welfare payment are taxable and which aren’t. You will need to check separately to see whether a particular payment is subject to PRSI.

      Best regards,

      Seamus

  10. Hello, can you register a business name in Ireland if you are not a resident in Ireland? What if you had a ltd company and paid a bond for a non resident director and then wanted to register a completely separate business name – can you register a business name? Thank you, C

    • Hi Claire,

      Thanks for the comment. A person who is not resident in Ireland can register a business name here as long as they have a trading address in Ireland.

      An Irish company can also register a separate business name.

      Best regards,

      Seamus

  11. Hi Orla,

    I pay PAYE at present and I’ve a business idea for which I would be a sole trader (and possibly one other colleague will come on board in a few months). We want to test the waters first in the market, if I register a business name now does that automatically make me liable to being self-employed etc. I’d like to register the name now but if I don’t go ahead with the venture am I opening myself up to Revenue Commissioner problems.

    I ask because: a) the business might not be legitimately running until 2/3 months after registering the name, b) the business will be registered under my name but a partner may join within a few months, c) I might not even go ahead with the venture after registering the name. What would the position be under those three scenarios.

    Your advice would be very much appreciated.

    Regards

    Seán

    • Hi Sean,

      Thanks for the query.

      You can register a business name separately to registering for taxes so it is possible to just register the name for the moment and if you decide to go ahead with the business you can then register for tax.

      If there will be another person in the business with you, then you will need to decide what form the business will take:
      * Trade as a sole trader with the other person as an employee
      * Form a partnership
      * Form a company (may not be suitable if you are not sure the business will take off)

      If the business becomes a partnership than you can re-register the name.

      Note that registering the business name does not give protection. Once you submit the form to register a name, the CRO does not check the name against the registers for duplications. However, if you register a name that is already in use by someone else, for example calling your restaurant “McDonalds” (even if your name is McDonald), then you can expect to get a letter from their solicitor.

      Best regards,

      Seamus

  12. Hi Orla,
    I had a small business retail outlet selling mans and ladies fashion. I never registered for VAT as our yearly income never exceeded €70,ooo – Would I have any outstanding tax liability now that I have ceased trading?

    • Hi James,

      Thank you for your query.

      As long as you were never required to register for VAT and you never elected to register for VAT you should not have an outstanding VAT liability on cessation of your business.

      Best regards,

      Seamus

  13. Hi Orla,

    I am thinking of registering as a sole trader but the newish VAT rules have me a little confused. I will be working as a software developer and most, if not all, my clients will be in the US. Would I have to register for VAT if I make over 37,500 a year from this service? I’m not sure I can charge these clients VAT as they have no means to reclaim it so I’d have to take the hit.

    Thanks.

  14. Hi Orla,

    Could you help me with my query, this year in July I did a one one-off job, soon after I did my work I have presented project to company.However only on 10th September 2010, I have registered for self assesment/ income tax purpose with Revenue.On the TR1 registration form I stated that I started trading in September, however I completly forgot about the fact that I did a job in July, I have not yet invoiced the client for the July job as yet, currenly I would like to send invoice to the company for work and then seek a payment. Could you please advise if the fact that I did the job prior registration for the income tax may have cause problems? Also If I am to issue first invoice, what date should I date my first invoice in that case? thank you in advance for help.

  15. Orla,

    I have been placed on a 3 day week and am considering starting my own company in the same consulting area as my employers company. There are no conflicts of contract. Is there any restriction on having two employments at the one time. One where i will be a PAYE member of staff and the second in my own company i will be owner Director. My employer cannot offer me full time work.

    • Hi Joe,

      You can have two employments at the same time even where you are the owner/director in one company. When you complete your income tax return at the year end, both salaries will be taken into account when calculating your income.

      You will still have just one set of tax credits and one overall cut-off point though. You may need to transfer some of your cut-off point and/or tax credits to your second employment if they are not being used in your first employment. You can call the Revenue PAYE line to do this 1890 222 425.

      Best regards,

      Seamus

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  17. Great website. A lot of the questions above apply to me, but its a pity the answers weren’t posted publicly. Would be a great resource and prevent duplicate questions.

  18. Hi Sean,

    Many thanks for your kind words about the blog and your feedback.

    The main reason I don’t reply to some queries publicly is when I need to request further information and I don’t want to invade someone’s privacy. Also, when I was on annual leave my colleagues responded to some of the queries by email.

    However, I will have a look at the queries and their answers and see if I can put together a blogpost that would be useful to others.

    If you have any queries I can help you with in the meantime, please leave a comment or email me on blog@parfreymurphy.ie.

    Best regards,

    Seamus

  19. Hi Louise,

    I will be travelling to Central America for 6 months in Dec 2010 and then (Visa Pending) I plan to emigrate to Canada.

    During my 6 months in CA I will start and work on an online business and I intend to keep it going in Canada.

    My question is should I register as a sole trader in Ireland before I leave (I think this will impact my business credibility if I do not) and then become a sole trader in Canada when I get there or what would you advise?

    What are your thoughts on above?

    Cheers!
    Len

    • Hi Len,

      You state in your comment that you will actually start the business in Central America so I am not sure why you would want to register for taxes in Ireland. Whether you register in Ireland depends on how long you will be trading in Ireland before you go. As you are emigrating you will need to both register and deregiser within the space of a few weeks. And you will need to submit an Irish tax return for 2010 while you are on your travels. If you will not actually trade in Ireland before you go, there is no point in registering.

      You will need to check with the relevant authorities in Canada about setting up a business there and also where you will be resident for tax purposes in 2011. This may give you a better indication of where you should register the business.

      All the best with your travels and your new business venture,

      Seamus

  20. Hi Orla,

    How many days/weeks do I have to send in the TR1 form after I started my business as a sole trader? Or should I send the TR1 before I did any work?

    Regards,

    Tom

    • Hi Tom,

      You are obliged to submit a TR1 and register for taxes with the Revenue Commissioners as soon as you commence to trade. You should ideally send in the TR1 form as soon as you know you will be commencing. If you have already commenced, just send in the form as soon as you can. Just remember to note the date you actually started trading on the form. If you are registering for VAT, only invoices date on or after this date can be included in your VAT return.

      Best regards,

      Seamus

  21. Thanks for the blog. It’s very helpful.

    My question is about picking the dates for the accounting year. I started out as a sole trader at the beginning of November, but ideally I’d like my accounting year to run from 1st January. My question is whether the time between now and January will count as my first accounting year (if that makes sense) and if I’ll have to pay the minimum annual PRSI and levies for that period, starting again with those obligations again in January.

    I’ve paid some contributions this year for PAYE work, and I’m not sure either if they’d be offset against those minimum contributions.

    Sorry if this doesn’t make sense. I’m just trying to make sense of it all and when I rang Revenue, they agreed that it was ‘an interesting question.’

    • Hi Siobhan,

      An interesting question indeed!

      As you commenced to trade in 2010 you are obliged to file a 2010 income tax return with the Revenue Commissioners. Your sole trade profits for the period ended 31 December 2010 will need to be declared on this return together with details of any other income and you will need to pay PRSI on this income.

      As the tax year is on a calendar basis, it is easier to also do your accounts on this basis. i.e. from January to December. (This can also avoid potential additional income tax liabilities arising when the sole trader ceases to trade.)

      So your first set of accounts will be from the beginning of November to December 2010. Even if you decided to do your accounts from November 2010 to October 2011, it won’t avoid the need to send in an income tax return for 2010.

      With your employment you would have been paying class A PRSI. Now that you are self employed you will be paying Class S PRSI. These two classes of PRSI are totally separate and therefore the PRSI you have already paid in 2010 will not be taken into account in respect of the Class S PRSI you may have to pay on your sole trade profit for 2010.

      If your sole trade profits for the period ended 31 December 2010 are above the relevant PRSI threshold of €3,174 then you will have to pay 3% PRSI on same. Self employed persons are exempt from Health Contributions where the annual income is €26,000 or less in 2010. The minimum annual PRSI contribution for self employed persons is €253 in 2010.

      I hope this answers your query but if you have any more questions, please let me know.

      Best regards,

      Seamus

  22. I am currently unemployed and in receipt of jobseekers allowance for myself and my wife. For a hobby my wife makes her own hand crafted jewelry, which she wishes to sell at craft fairs events around the country. The profit from this would not be significant, it would purely be a hobby and a social networking exercise. Do we need to register this as a business? If we do will it endanger our jobseekers allowance?

    • Hi Max,

      Any income from self-employment will be included in the means test for Jobseekers Allowance. See here for more information. Although you mention that the profit would not be significant it could still be construed to be a small business.

      Best regards,

      Seamus

  23. Hi Orla,
    I’m currently a PAYE employee. I work 2 and half days a week and earn just under €25,000 per annum. My husband is also a PAYE worker, currently on reduced hours, and earns approx. €60,000.
    As a hobby I make pictures and soft furnishings for children. A local shop has expressed an interest in selling some of my pieces in the run up to Christmas.
    My question is whether I will need to register as a sole trader if I want to do business with the shop? Will they look for a tax number from me?
    Secondly, if I do register as a sole trader will I need to pay income tax on my income from this, and if so when would this tax need to be paid? Any income I make from it would be very low- will I have to pay 20% tax on it, or is there a threshold under which I do not need to pay tax? Thanks so much for your help.
    Kate

    • Hi Kate,

      In general, a married couple in 2010 can earn up to €72,800 at the 20% tax rate, anything earned in excess of this is taxed at 41%. As your husband earns the higher salary I take it he has the higher standard rate band of €45,400, thereby leaving you with the €27,400 rate band. As your salary is €25,000 you are left with €2,400 which can be earned at the 20% rate.

      An individual with assessable non PAYE income of less than €3,174 is not required to register for self assessment and can continue to have the liability on such income assessed within PAYE by means of coding in the income against their tax credits for that year. You would need to let the Revenue know how much additional income you will earn and they will adjust your tax credits accordingly.

      However you should register for self assessment if your sole trade income is greater than €3,174 by submitting a Form TR1 to the Revenue Commissioners. The shop will not necessarily look for a tax number from you but will more than likely look for an invoice. Please note that you should keep a record of all expenses incurred in respect of your sole trade as these can be deducted from any turnover you make in a given year.

      Once you are registered as a sole trader you are obliged to file annual income tax returns with the Revenue Commissioners on or before 31 October each year. So for example your 2010 income tax return would need to be filed with the Revenue Commissioners on or before 31 October 2011, you will also need to pay over the tax, if applicable, on this date.

      You should also be aware that Class “S” PRSI, the health levy and the income levy will also be charged on your sole trade profits.

      Best regards,

      Seamus

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  25. Hi Orla,

    mainly referring to an earlier post by Barry: Which is better (more affordable) setting up as a sole trader or limited company ? I wouldn’t be able to say if there is very little debt involved with the business if that’s the most important criteria for such a decision. Say, running a food shop the most critical thing I would think of is the rent for the premises ?

    Many thanks

    Michael

    • Hi Michael,

      Running a business as a sole trader can be more cost-effective than as a company in terms of accountancy and bookkeeping fees as there are fewer returns to be filed and forms to be filled out. For example, if running a company you would need to complete a Corporation Tax return as well as an Income Tax return.

      In terms of which is better from a tax point of view, the general rule is that if you are spending all that you are earning and there are no spare profits in the business, there is little point in being in a company.

      If you are interested in making contributions to a pension, a company can be the better option but this needs to be weighed up against the additional paperwork and accountancy fees involved in setting up a company.

      There also may be a good legal reason to be in a company to offer some protection to the owners of the business in the case of a claim being taken against the business. You would need to talk to your solicitor about this.

      For more information, have a look at my previous post Sole Trader V Limited Company.

      Best regards,

      Seamus

  26. Hi Orla

    Great website and may i say this is a fantastic and trucly considerate service you offer at these times.
    My question is, i am currently a PAYE employee. However my company is at risk of closure. However the business unit i head up is quite profitable and my plan is to trade as a sole trader with my existing customers, should my company wind up. However if i am to support my current clients, i must be in a position to start trading the day following the likely closure of my current company, else my crop of clients will have no choice but to find somebody else. However there are certain formalities that i would need to attend to, now, to allow me to trade within 1 day of my company closing, notably i must be VAT registered. My question therefore is, can i successfully apply for a VAT registration while i am a PAYE employee? What is the normal processing time to successfully obtain a VAT number? Assuming my company still continues to trade for maybe 6-9 months, my VAT activity would essentially be dormant. Will this be an issue?

    • Hi Declan,

      Thank you for your kind words about the blog. Much appreciated.

      You can register as a sole trader (for VAT and income tax) while you are still an employee. It can take between 2 and 4 weeks to register depending on the time of year. Have a look at the VAT registration post to see if you need to register for VAT at all. You will still need to register for income tax in any case.

      You should register as close as possible to the time when you will begin trading. However, I understand your dilemma. If you do decide to register ahead of time, you will still need to file VAT returns, even if they are NIL.

      Best regards,

      Seamus

  27. Hi Orla,
    I have been working as an employee in Ireland for the last 8 years. My company made me redundant in September this year and I left the country to start living in my country of origin where I am at the moment.
    An opportunity to distribute certain product came up with a local company so I was thinking of becoming a sole trader in Ireland and start distributing their product over there. However, I do no want to live in Ireland full time, wouldn´t mine travelling over though as the business will require.
    I wonder 1) what are the steps I need to follow to start my distributing business and 2) how much taxes roughly will I have to pay. My understanding is that one pays taxes as sole trader only when profit is generated. Could you please confirm this.
    3) Is it feasible and desiderable registering my company in Ireland or is it better for me to register it in my country and trade in Ireland?
    Thanks for your time,
    Mari

    • Hi Mari,

      As your sole trade will be carried on in your home country where you will have your fixed place of business and you will only be making supplies to Ireland you should consider registering for taxes in your home country.

      If you have any future queries, please do not hesitate to contact me.

      Best regards,

      Seamus

  28. HI ORLA I AM THINKING OF SETTING UP MY OWN BUISNESS REPAIRING ROLLER SHUTTERS AND INSTALLING IM AT THIS GAME 10 YEARS NOW BUT I HAVE NOT GOT THE SLIGHTIST NOTION ABOUT BUISNESS END ECT I DONT WANT TO TIE MY SELF TO ANYTHING JUST INCASE IT DOSENT WORK OUT AND I LOSE MY HOME IF SAY THINGS GO BAD. I WILL BE LOOKING TO EMPLOY ABOUT 2OR 3 PEOPLE STARTING OFF WHAT WOULD BE THE FIRST STEPS WOULD I BE BETTER OFF REG SOLE TRADER OR LTD COMPANY

    • Hi Jason,

      Have a look at a quick summary of the differences between trading as a sole trader and as a limited company here.

      In relation to protecting your family home, trading as a sole trader will mean that all debts incurred by the business become personal debts if the business ceases. This is why many people prefer to form a limited company.

      A limited company provide complete protection however. In general terms, if directors are running the business recklessly or trading while insolvent, the directors may become responsible for the debts of the company. Furthermore, banks often ask directors to sign personal guarantees which mean that if the company is unable to repay the bank, it falls to the directors.

      I’m not sure where you are based but the best thing to do would be to call in for a meeting to discuss how to set up, what the best option for you would be, how the tax system works etc. The meeting would be free of charge and without obligation.

      Best regards,

      Seamus

  29. Hi Orla

    I hope your still checking this blog but id take a chance!

    I have been thinking of setting up as a sole trader for some time now if fact in March I droped some sample product(postcards of local landmarks) in to two local shops the shops came back to me recently looking for more. As if yet I havent registered as a sole trader but with these new orders I am thinking now is the time. My circumstances are that I am already full time employed would this cause any issue even down the line if I become a sole trader? Also could I claim for any expenses incured so far since february or march in short can I claim for anything before the tr1 form has been filled out? I have recieved cheques from the shops but have not cashed them yet as im unsure of what steps to take.

    Regards
    Kevin

    • Hi Kevin,

      Yes indeed, I am still checking the blog!

      In answer to your queries:

      You can be employed and be self-employed at the same time so it should not cause an issue. Your income from both sources are combined when calculating your income tax, USC, PRSI etc and you need to include both in an income tax return each year.

      You can claim for expenses incurred up to three years before the commencement of the trade. More information is available in this Revenue leaflet.

      Best regards,

      Seamus

  30. The Form TR1, question 11 asks to state Business Name.
    Does that mean I need to register Business Name before becoming Sole Trader ?

    Many thanks,

    Alex

    • Hi Alex,

      You can register a business name after you submit the TR1 or before or you can decide not to use a business name and just trade under your own name.

      Best regards,

      Seamus

  31. Hi Orla,
    I want to open a website that allows people to advertise there academic services on it.
    so I have couple of questions
    1- after registering will I have to supply how much I made from the website every year or quarter?

    2- I am a current employee at the moment, so if I make any earnings from the website will each one be taxed separately by revenue or will my salary and what I make from the website be added up and then taxed?

    3- other than keeping a record of how much revenue I have made do I have to do any other book keeping for the revenue office or the CRO people?

    • Hi Jacob,

      Thanks for your comment. The answers to your queries depend on whether you set up as company or as a sole trader.

      Sole Trader

      1. As a sole trader you will need to submit an annual Income Tax Return .

      If you are registered for VAT you will need to submit VAT returns every two/four/six months.

      2. Your income from your sole trade and your employment income will be added together on your income tax return to calculate how much tax is owed.

      3. You will need to keep proper books and records, including records of income, expenses, fixed assets bought etc as well as sales and purchases invoices, bank statements etc. If you have never kept books before then it would be advisable to go on a bookkeeping course or to outsource it to a bookkeeper.

      Company

      1. You will need to submit a Corporation Tax return to the Revenue Commissioners each year and an Annual Return to the Companies Office.

      If you are registered for VAT you will need to submit VAT returns every two/four/six months.

      2. You will need to submit an income tax return each year which will combine your current employment income with your salary from your new company and tax them together.

      3. You will need to keep proper books and records, including records of income, expenses, fixed assets bought etc as well as sales and purchases invoices, bank statements etc.If you have never kept books before then it would be advisable to go on a bookkeeping course or to outsource it to a bookkeeper.

      If there is anything I can help you with, please let me know.

      Best regards,

      Seamus

  32. Hello! I just move from Austria to Ireland. In Austria I run a business (sole trader) for the last 3 years and I would like to do so in Ireland as well.

    I would have 4 questions about that and do hope that you can help me.

    1. If I register as a soletrader I would have to make a Income Tax Return once a year – do I get this right? – Nothing else?
    (I’am going to have a very smal craft business and might have a total sale volume of 30000 per year and about 9000 benefit out from that)

    2. In Austria we have something for small business so that I did not have to pay income-tax. This was valid as long as the benefit is not more that 10000 per year.
    Is there anything like it in Ireland or do I have to pay tax from the fist Euro I earn ? 🙂

    3. Do I have to pay anything for health insurance? I read something from 253 Euros (PRSI) but do not know if that is per year or month.

    4. How much does it cost to register a business at the revenue.

    Many thanks
    Sophie

  33. Hi Orla,
    could you advise please,do I need to register for VAT if I don’t know how my business will go, but I have to spend more than 10000 Eur per year for advertising, it is reason to register just to get some money back?
    Regards Dmitry.

  34. Hi Dmitry,

    If you are dealing with all (VAT-registered) business customers the best thing may be to register for VAT anyway as you can claim back the VAT on your purchases, advertising etc. Your customers won’t mind if you are registered for VAT as they can claim it back.

    If, however, your customers will be mainly private individuals, then you will need to charge them VAT. This will increase your prices by 13.5% / 21% and your customers will not be able to claim back this VAT. Therefore you need to weigh up how much VAT you can claim back on advertising and other purchases with the effect registering for VAT will have on your sales.

    Best regards,

    Seamus

  35. Hi im planning on setting up a business, it will be online based for a while until I get more stock and money built up to take it to other businesses and individuals.
    I was thinking of a limited company because I want to protect my home. Ideally I wont be taking a loan to set up but build it up gradually myself. can you give me any advice on this and on the costing of setting up a business inc tax.

    Thank you
    Sorley

      • Hi Seamus,
        I would like to do the same, to open a business on line.
        I do live and work (then, I am a tax payer) in Ireland since two months.
        How/What should I do about taxes?

        • Valentina,

          Register with the Revenue Commissioners using Form TR1 if you are going to be a sole trader.

          Regards,

          Seamuis

  36. Hi Orla,

    Just wanted confirmation on something if you start to trade say july 2010 i understand your first income tax return will relate to profits from July to Dec 2010 and this will have to be filed with revenue by Oct 11. Each year following do you have to split your accounts by months to fit in with Jan – Dec tax dates.

    • Hi Rachel,

      If you are preparing the tax return yourself, then the easiest thing to do is to prepare your accounts with a December year end, e.g. Jul to Dec year 1, and Jan to Dec thereafter.

      Best regards,

      Seamus

  37. Hi Orla,

    I am a full time employee. Thiking of opening up business but keeping my job. What is the best choice.
    .. sole trader or limited company?
    what are the tax implications? how will my tax be calculated?
    will I still have to make a tax return?
    how about PRSI?
    thank you

    Peter

  38. Hi Orla

    Wow Fantastic site, you don’t expect to get this kind of service for free. well done.

    I have a quick question, i have just completed a dog grooming course and will be hopefully grooming the local dogs in my area. I am a full time PAYE employee and so is my husband. I really don’t expect to earn too much its more of a hobby really but my husband wants me to register as a sole trader. What implications does this have for my PAYE.Also I am paying an A1 stamp in my current employment and i see you mention in other posts that i would have to pay an S stamp, to be honest i don’t really expect to earn more than a couple of hundred euro a year doing this so would I still have to pay an S Stamp.

    Thanks again.

    Liz

    • Hi Liz,

      If you believe that your income from your business will be less than €3,174 then there is an option to have the tax on your small business taken care of by adjusting your tax credits and cutoff point. Any tax on your business profits will in effect be paid for through your employment.

      Once you have calculated your net sole trade income you should contact the Revenue Commissioners on 1890 22 24 25 and ask them to incorporate same into your Notice of Tax Credits. The implications of this is that the Revenue Commissioners will reduce your tax credits and standard rate band by the amount of your net sole trade income and you will notice a decrease in your net take home pay from your PAYE employment as the tax arising on your sole trade income will be collected through your salary. You will need to have your PPS number to hand when you ring the Revenue Commissioners.

      Self employed persons are subject to class “S” PRSI on their self employed income at a rate of 3%. Please note that where an individual’s reckonable income is less than €3,174 there is no liability to PRSI.

      If you have any further queries please do not hesitate to contact us.

      Best regards,

      Seamus

  39. Hi,
    Just wondering if you could help. I am currently working as an electrician for a company.I am wondering if it is possible to register as a soul trader paying taxes etc. without it effecting my current employment and tax contributions or what is the best way of going about it?

    thanks

    • Hi Colin,

      Thanks for your comment.

      You can register as a sole trader while still remaining an employee of another business.

      When you prepare your tax return at the year end, you will need to include both your income from your sole trade and your employment. Note that you only get one set of tax credits and cut-off to be used against all your total income.

      If you need any assistance in setting up, please let us know.

      Best regards,

      Seamus

  40. Hi, My wife is a housewife and wants to work for a franchise company running 2 classes a week on a commission basis. Her yearly profit would be approx €4000 – €5000 a year. She was told she has to register as a sole trader. But I want to know is it worth her while? What tax would she need to pay? or would she just be working for nothing at the end as we would probably loose FIS and Home Carers too.
    Thanks for your help

    • Hi,

      If your wife is earning about €4,000 – €5,000 per year then she will need to register as a sole trader. She will need to pay income tax at 20%, PRSI at 4% and Universal Social Charge of 2%. Her income tax can be reduced by any tax credits she may be entitled to.

      Due to her level of income, she may still be entitled to the Home Carers Credit – see http://www.revenue.ie/en/tax/it/leaflets/it66.html for details.

      You should check with your local social welfare office to see what effect earning this income will have on your FIS to see if it is worth it.

      Best regards,

      Seamus

      PS: A handy tax calculator can be found here http://www.thejournal.ie/budget-calculator-2011/#basic-calculator

  41. Dear Sirs,
    I´m from Germany and live here since 4 years.Every year we´ve made the income tax with the help of a tax consultant.We don´t pay tax and we don´t get something back(under 37500€)and the consultant is expensive.In Germany you can buy programs on a cd (8-10€)for making your tax.It´s very easy to do it.Is it possible to get such a cd here in Ireland to make the income tax in an easy and cheap way?
    best regards
    Bernd Lehmann

    • Hello!

      If you want to prepare the return yourself, the cheapest way to do it is to register for the Revenue Online Service (ROS) http://www.revenue.ie. You can then complete your income tax online. There is a new option which will import the information from your last return to guide you in preparing this year’s return which should make it easier for you.

      You can find some guidance on the income tax system here: http://www.revenue.ie/en/business/self-assessment.html

      Bear in mind that it is the busiest time for the tax office so if you want to file on ROS you should register without delay.

      Best regards,

      Seamus

  42. Hey,

    Love the blog, wonder if you could help ne.

    I want to register as a sole trader and i can see myself earning 2 or 3K on Web-Design for the year on top of my current employment which is just below the threshold for income tax…If I register as a sole trader does that mean my whole wage becomes liable for tax?

    Thanks
    D

  43. Hi
    I set up a company as sole trader, but for first year I did not do any business and it may stay for next year. I am tax registered, but not sure if I supposed to pay any PRSI if my business do not record any sales or inocme? Is there minimum amount of PRSI that have to be paid by sole trader iven if hi do not record any income?

    Thank you for your respond.

    Regards
    Tom

    • Hi Tom,

      Self employed persons are exempt from PRSI where reckonable income is below €3,174.

      However please note that because you are tax registered you are obliged to file an income tax return with the Revenue Commissioners even if you did not record any sales.

      Best regards,

      Seamus

  44. Hi there Orla,

    I have recently been made redundant from my position and have decided to launch an ecommerce website. Am I ok to register as a sole trader for the purpose of selling electronic goods that will be imported from China?

    In addition, how much would it cost for me to register the company name and become LTD?

    Thanks in advance

    -Jon

    • Hi Jon,

      I’ve passed your query to my colleague Seamus Parfrey who should be in touch shortly.

      Best regards,

      Seamus

  45. Hi Orla

    i have just registered as a sole trader. the work will be assembly and sometimes installation of home furniture. i have to register for vat. who decides the rate – to me it looks like mostly 13.5% where i assemble and install (goods and service) obviously it would be better for me at 13.5% because most of my purchases are at 21%. do i decide or is it the vat man and how does he let me know his decision. thanks

    • Hi Caroline,

      This area of VAT can be quite complicated and can depend on a number of factors including whether the items are furniture or fixtures. I would recommend that you get advice from an accountant or tax advisor to ensure you are charging the correct VAT rates from the start. Otherwise you could leave yourself open if you have a Revenue Audit. Alternatively you should contact the Revenue and ask them for assistance in arriving at the correct VAT rate. Ensure you detail each product/service that you provide as each one could have a different VAT rate.

      Best regards,

      Seamus

    • Hi Sarah,

      Once registered as a sole trader you will be liable for Income Tax, PRSI and the Universal Social Charge (USC) on your taxable income for the calendar year. The level of tax payable will be determined based on your total income earned during the year, not just your income from the trade.

      If you have any employee you will also have to register for PAYE/PRSI and you will have to pay employers PRSI on their salary.

      Best regards,

      David

  46. I recently sent in a TR1 form to register myself up as a sole trader.
    I got a letter from revenue stating that I ve been registered for Income tax.
    My income tax registration number in the letter is the same as my wifes PPS number.
    Is it supposed to be that way ?
    Is it because both she is a PAYE employee & we are under the joint assessment system (with she being the assessable spouse)

    • Schalken,

      If you are being assessed for Income Tax under joint assessment, one of you will be deemed to be the assessable spouse for Income Tax; in this case the assessable spouse is your wife. You can arrange to change this by nominating who this should be and informing the Revenue Commissioners. You might find the following helpful: http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/taxation_of_married_people.html

      Best regards,

      David

      • HI Orla
        I am working as a paye worker but also have a small farm that after capital allowances doenst make any profit. however this year i have been charged with the 253 euro minimum PRSI payment which I believe may be related to self employed income. Is this correct for people who would already pay much more that the 253 mimimum as part of PAYE employment.

        • Hi Sean,

          There is a minimum Class S contribution for self employment of €253. The contribution is calculated on your income prior to applying capital allowance. Therefore it may have been the case where you had profits prior to capital allowances being deducted.

          If you require further assistance please get in contact with us.

          Kind regards,

          David

  47. Hi,

    I want to start a photography/videography business. How risky is it running as a sole trader in these businesses if I take out public liability insurance?

    Also, if I take on interns do I have to fill out any paper work for this?

    One last question, how difficult is it to file your own income tax ? Would I need an accountant?

    Thanks in advance,

    Conor

  48. Hi Orla,
    Great site/blog. Very helpful, thank you.

    My question is also in relation to “Sole Trader” V “Limited”. I have read your post & I think I understand the difference. However, I am sure each case must stand on its own. I am unemployed but looking at setting up a business. I have no idea what the projected turnover could be (how long is a piece of string?). Basically, I will buying a product & selling it on for profit. I will be dealing with both Trade & Retail clients. My expenses will be my own running costs & basic office stuff. I guess I could easily exceed the €75k turnover.

    So:
    1. Sole Trader or Limited?
    2. VAT registered or not? (Personally I think so)
    3. What is the situation with PAYE & how do I pay myself & record that for Revenue?
    4. Do I register under my personal name & then register a trading name? Which name should the bank account be in?
    5. Should I talk to an accountant & a solicitor?
    6. Any other advice?

    Cheers,
    Alan

  49. Hi there. I wonder if you can help me at all? I wish to start up a small pet care related business. I want to set up a website and do some advertising to see if there is a client base for me first. Is it okay for me to do this without registering the business or registering with revenue? I am on an unpaid career break from another job. I’m not sure it will bring in that much money and wonder how much I need to be earning a week to be eligible to pay tax. Would be grateful if you could help me. Many thanks to you.

  50. Hi
    I am a PAYE worker in the IT industry.
    I have been asked to do a relatively small job for a business and I’m presuming they will be require an invoice of some kind.

    I’m not VAT registered. The additional income will be small.

    Can I just write up my own Invoice with my name, address etc and put a date, description(which will be labour) and the invoice total?
    Will that be enough for their accountant?

    I plan to just declare the value of the invoice in my annual tax return.

    Is that all above board or do I have to register as a sole trader, VAT etc etc.

    I want to keep the paperwork to a minimum since it is a once off and the money is relatively small.

    Any advice appreciated.

    thanks, Patrick

    • Hi Patrick,

      Please have a look at our blog post on invoices here, as a guide to completing your invoice.

      An individual with assessable non-PAYE income of less than €3,174 is not required to register for self assessment and can continue to have the liability on such income assessed within PAYE by means of an adjustment to your Tax Credit Certificate. You would need to let the Revenue know how much additional income you will earn and they will adjust your tax credits accordingly. However you should register for self assessment if your sole trade income is greater than €3,174 by submitting a Form TR1 to the Revenue Commissioners.

      If your income, in any twelve month period, does not exceed or is not likely to exceed €37,500 (in the case of supply of services) or €75,000 (in the case of supply of goods) you are not obliged to register for VAT.

      I hope the above answers your questions.

      Regards,

      David.

  51. Hi there,
    This is a great idea for people to ask questions as I am finding it quite hard to get some information.
    I want to become self employed, I am currently on lone parent and in receipt of rent allowance for the past couple of years and to be honest I dont know where to start. The first thing I have done is ring the social welfare and they have said I can stay on lone parent and earn up to €130 without affecting it, then another person there says I have to go on to the back to work allowance in which I will lose it after to years.
    I looked into sole trader vs limited company and i think sole trader is the way to go. I dont get all the vat regulations as in will i have to pay vat etc.. I am making a product and selling it so income will completely vary. So i dont even know how the social welfare will work it out and I dont know if I will be better off, will I lose all my benefits because if this is the case I cant afford to set up.. Also what grants are available to me?
    There are so many ways of going about this but I need the best way to be financially better off and this I cant seem to figure out.

    Hope you can help me or even direct me in the best direction for a step by step guide on how to this.

    Kind Regards
    Louise

    • Hi Michael,

      Yes, you can be a sole trade and also have income from a PAYE job.

      You will include your PAYE income together with your sole trade income on your tax return each year. Details of your PAYE income will be given to you by your employer on a Form P60.

      Kind regards,

      David

  52. Hi Orla,

    My wife and I are thinking of setting up a business, however, we are not sure whether we should choose Sole Trader or Partnership. Which one do you think will suit us best?

    Regards,
    Jack

    • Hi Jack,

      For two or more people entering into a business together a partnership or company structure might be the best option.

      As a sole trader, either you or your wife would be personally liable for all liabilities of the business whereas with a partnership you would have equal liability. A company structure would allow you both to operate the business while retaining limited liability, additional security for yourselves.

      Check out our articles on business structure and business planning – they may be of use to you.

      regards,

      David

    • Hi Bernard,

      Yes of course you can have a part time business. There are many seasonal businesses that people operate. E. G. during Christmas. The profit from this business will then need to be included on your Income Tax return submitted to the Revenue Commissioners each October.

      Regards,
      David.

  53. Hi Orla,

    My question will probably sound very silly and it might be simple but I am new to this, I find it a bit confusing. Im a teacher, im a employee in one school and Im a self employed (for only a few months) for some teaching work I do outside the school too. My problem comes here; I obviosly use my name and I have registered with the Tax Office for tax purposes (did my returns) but I dont know If I can legally send invoices using only my ppsnumber. Havent registered for VAT either as the money is too little. The only thing I want to do is declare the income I get being a self employed basically and Im not 100% if Im doing the right thing.
    Many thanks for your help.

    • Hi Maria,

      As you are registered as a sole trader you will be required to keep a record of your income and issuing invoices to your customers will help in this regard. Together with your PPS number a basic invoice should include, your contact details (Name, Address, Telephone number/email address), the customer’s name and address, description of the service and the cost of that service.

      I would suggest having a look at our blog post on VAT invoices for some guidance. If you require any further assistance we will be happy to help.

      kind regards,
      David

  54. Hi Orla,

    I’m wondering if you can help me?
    I’m looking to set up as a sole trader under a business name. My work has several strands, 3 of which come directly under the new business (teaching singing/ voice work). The other two are singing and some arts admin (where I may work for other people and invoice them).

    I’m wondering,
    a) can I trade under both my business name and my own name?
    b) can I receive and bank cheques in both names?
    b)can I consider all of the work as one business (eg ME), and file one tax return, or do I have to consider it as several businesses?

    Thanks very much for your help. I am about to register the business name, but just wanted to clarify these points before I do.

    Regards,
    Mallika

    • Hi Malika,

      Thank you for your comment.

      Yes of course you can trade under your own name and a business name and I would recommend that you try and keep both businesses streams separate so that it will be easy to identify the profit and loss of each.

      With regard to the lodgement of cheques and to whom they should be made payable to, this would depend on the banking institution that you would use. I would therefore suggest meeting with them to discuss your banking needs.

      Once you register as a sole trader your will be required to file an income tax return each year. This return will outline all income from all your business streams, including any other income you receive (e.g Dividends, Bank Interest, PAYE income etc…). Therefore you will only file one tax return each year.

      I hope the above answers your questions.

      Should you require any further assistance please do not hesitate to contact us.

      Kind regards,

      David

  55. Hello Orla,

    I am Non-EU National and having a STAMP 4, which allows me to setup business in ireland. Point 5 at below link confirm the premission to open a business on STAMP4.

    http://www.inis.gov.ie/en/INIS/Pages/WP09000002#permission

    Myself I am working and having job which I do not intend to leave. However my spouse has joined me in ireland and currently unemployed.

    I want to open the Limited company or Sole trader and than I want to employee my wife as an employee becasue she has no permision to open business in ireland.

    would know wheather sole trader or opening a limited company would be a good idea ?

    Also I would like to know whether I can have my wife as a second director if i choose limited company or not ?

    Please let me know your opinion on this.

    Regards,
    Amit

    • Hi Amit,

      Thank you for your comment.

      Either the sole trade or limited company would be good options for your business but really it depends on how much business you intend to conduct and expected results. As a sole trader, you would be personally liable for all liabilities of the business whereas a company structure would allow you to operate the business while retaining limited liability – something you may want to consider for your start-up business.

      In regard to acting as company directors, I would recommend reading Leaflet No 17 on the Companies Registration Office website, as there is a requirement that at least one of the company directors are EAA resident or a bond will need to be put in place.

      Please do not hesitate to contact us directly so we can advise you further on the above points, specific to your needs.
      Kind regards,

      David.

  56. Hello,Orlando
    I am going to set up chinese take away food with my friend as a sole trader but partnership and the turnover expecting less then 75000 euro.
    Do we need need register vat?
    If turnover is more then 75000 euro how much vat rate will be apply?
    As my friend has full time job we agreed to pay him only 4000 euro a year. Then is he need pay extra prsi,universal charge,based on 4000 euro?
    Could you recommend any free accounting software?I want to do accounting myself..
    Thank

  57. Hello David,

    Thanks for your advise. I want to tell you that I have been living in Ireland since last 6 years and hence it fulfill the Definition of Residency in Ireland.

    I expect atleast 10-15 thousand Euro results in a year.

    What you would say on this ? Please advise.
    Regards,
    Amit

  58. Hi there, I am wondering if you could help me with a few questions.

    I am currently working full time but want to start up a company on the side. I am wondering if it is possible to start up the company and create my website and start selling online but not register for tax etc for a while until i get an idea of the possible income from it?

    If I earn 30,000per year and my husband earns 15,000 is there a certain amount i would be able to earn from my company without having to pay any tax atall?

    would really appreciate your advice, best regards!

    • Hi Amanda,

      Thank you for your comment.

      Once a company start trading it is required to register for taxes (Corporation Tax at a minimum), with the Revenue Commissioners. The company is then liable for Corporation Tax at 12.5% on any profits it make. If the company makes a loss it may not be liable to corporation tax and these losses can be carried forward and off set against future profits of the company.

      With regard to how much you can earn form the company without having to pay any tax – This depends on how much of your tax credits are been utilised by your current salaries. If ye are both paying tax on your current income it would be reasonable to assume that you are using all your tax credits and would pay tax on any income you earn from the company.

      I hope the above helps with your query.

      Should you have any other queries or require any further assistance please do not hesitate to contact me.

      David

  59. Hi I am setting up as a sole trader I will be selling flowers do I need to charge VAT on top of my flower sale price and if so is it @23%
    Thanks a mil
    Aiste

    • Hi Aiste,

      If your turnover exceeds or is likely to exceed €37,500 (in the case of services) you are required to register for VAT. If you do not think you will exceed this threshold you will not need to register or charge VAT unless you elect to do so. Why not have a look at our blog post on VAT registration?

      If you do choose to register, the Revenue website states that the VAT on sale of flowers would be chargeable at the reduced rate of 13.5%. Please see the following link to the Revenue Commissioners website.

      If you require any further assistance please get in touch.

      Kind regards,

      David

  60. hi,
    Im not too sure who to address this to.
    Im looking for some information.
    I start trading in january of this year and have regstered this business name kirwans Computers.
    I have recently signed a deal with a company and they have agreed to send work to my home.
    I have an office setup with all the neccasaary equipment and am basically looking tosee what steps i need to implement to have a successfull and effecient company.
    Firstly there is going to be probably 40-60 hours per week from this new business and i was thinking of taking some one on part time where i pay them for hours worked this will generally be 10-20 hours per week.
    Do i need to register for paye prsi and what other things do i need to register for,
    Do i have to pay a lump sum or can i just pay thier prsi and paye as they go. What rate of paye and prsi do i as an employer pay.
    I have not registered for vat as i do not see my profits been more than 37000 this year. and i also have not filled in my tr1 i think its called.
    i am new to all this so any help or guidance will be much appreciated.

    • Hi,

      Thank you for your comment.

      Once you have started trading it is advisable to register as a sole trader. During the registration process it will ask you about other taxes (i.e PAYE/PRSI and VAT) which you can elect to register for.

      If your turnover exceeds or is likely to exceed €37,500 (in the case of services) you are required to register for VAT. If you do not think you will exceed this threshold you will not need to register or charge VAT unless you elect to do so. Why not have a look at our blog post on VAT registration?

      Once you employ someone you are required to register for PAYE/PRSI. You will be responsible for deducting the taxes from their salaries and paying this over to the Revenue Commissioners. This is normally done on a month basis by the 14th day of the month, although if you pay and file the return online you have until the 23rd of each month to complete the return. You also have the option to set up a direct debit to discharge the total liability for the year.

      I hope the above is of help to you.

      If you require any further assistance please do not hesitate to contact me.

      Kind regards,

      David.

  61. Hi there,

    What a great website –

    I’ve read through the questions and responses & most of my queries have been answered – apart from one small one:

    – I am a PAYE worker in the higher tax band, using all my tax credits
    I am considering starting a business, as a sole trader, while continuing in PAYE employement.

    Assuming i do not choose to move credits around can I keep the tax affairs entirely seperate? I don’t want my colleagues in work to be made aware of my venture – will any sole trader earnings be highlighted in P60 etc?

    Thanks in advance

    C

    • Hi Catherine,

      Thanks for your comment.

      Your sole trade income will not be shown on your P60. You receive a P60 from your employer with the details of the salary they have paid you during the tax year.
      Once registered as a sole trader you will be required to submit an income tax return to the Revenue Commissioners before the 31 October each year. You will detail all income on this return (PAYE and sole trade). Nobody, but you or your accountant and the Revenue Commissioners will be privy to this information.
      I hope this answers your question.

      If you require any assistance in your new venture please don’t hesitate to contact us.

      Kind regards,

      David.

  62. Just registered my business, i am soletrader do i have an tax exemptions in my first year.. very worried about the tax .. for soletraders its very high… i am very worried cause i think i should just change to a LTD.

    • Hi Godfrey,

      Thank you for your comment.

      The tax that you will pay as a sole trader will depend on the profit that you will make for the year (income less any relevant expenses). Any losses that are incurred can be carried forward and off set against any future profits that the business makes.

      I would suggest reading our blog post on Sole Trader v Limited Company. to assess which option would be best for you.

      If you have any other questions please get in contact with us.

      Kind regards,

      David.

  63. hi im in the process of starting a new business i have registered the name already the thing is most companies i want to deal with wont deal with me unless i am reg for vat can i register for vat while still reciveing social welfare ? and if the business fails is there much problems with deregistering for vat ?

    • Hi Lee,

      Thank you for your comment.

      Once you start a business in Ireland you are required to register as a sole trader for income tax purposes. In general a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €75,000 (in the case of supply of goods) €37,500 (in the case of supply of services) is not obliged to register for VAT, but you can elect to do so if you which.

      If you elect to register for VAT and the business subsequently fails, once all returns are filed and up to date, there is a simple process to deregister for VAT.

      As regards registering for VAT while in receipt of a social welfare payment – this would be a question for the Department of Social Protection or your local Social Welfare Office.

      Kind regards,

      David

  64. hey
    im trying to become a sole trader in ireland

    it is going to be small shop and as fas as i know i don’t need
    to involve with VAT am i right??

    and im holding stamp4 defacto visa which im allowed to
    staying ireland as many as years i want to but do i need to
    get a business permition from immigration??
    in that way do i have to invest 300000 euro to get business permition?

    i’v been try to find out this for months no one seems to know

    • Hi Hanna,

      Thank you for your comment.

      To become a sole trader you are required to register for Income Taxes with the Revenue Commissioners on Form TR1.

      With regard to VAT, a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €75,000 (in the case of supply of goods) is not obliged to register for VAT.

      Finally, I would suggest contacting the department of Department of Justice and Equality to find out what the conditions of your visa are.

      Kind regards,

      David

  65. Great Website !!

    Just had a query.

    I’ve a small jewelry company selling online (not turning over too much) I’m considering selling into shops but someone mentioned to me that if i were to sell to shops i would have to register for VAT? is this the case?

    • Hi Leanne,

      In general a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €75,000 (in the case of supply of goods) is not obliged to register for VAT. But you do have the option to elect to register for VAT if you so wish.

      I would suggest that you read our blog post on VAT registration.

      Kind regards,

      David

  66. Im thinking of setting up as a sole trader and wondering if my sales are €36500 and my draw downs are €24000 and my expenses are €10000 so I pay 20% on €36500 or on €10000.

    • Hi Grannia,

      When filing your Income Tax return, with the revenue commissioners, your taxable profits are used to calculate your tax liability. Your taxable profits are your sales less allowable business expenses (e.g materials, postage, stationary, telephone, light and heat etc). Any monies you take/draw down from the business is not regarded as a business expense.

      If you require any further assistance please don’t hesitate to contact me.

      Kind regards,

      David

  67. Dear sir/madam,

    I registered a business last month thinking in work as a sole trader, but I have found a job in a company and I don’t believe my turnover as a sole trader will exceed the €5,000 euros, as I won’t work so much in my business. What should I do now? Do I have to pay Class S PRSI in this case? Should I deregister as a sole trader because the earnings may be less than 5,000?

    Thanks and regards

    • I Alex,

      Thanks for your comment.

      An individual with assessable non-PAYE income of less than €3,174 is not required to register for self assessment and can continue to have the liability on such income assessed within PAYE by means of an adjustment to your Tax Credit Certificate. You would need to let the Revenue know how much additional income you will earn and they will adjust your tax credits accordingly.

      There is no reason why you cannot be registered for self assessment and have a regular PAYE job at the same time. Therefore you will have to file an Income Tax return yourself by the 31 October each year. You will only pay class S PSRI on any sole trade part of your income/profits.

      If you require any assistance please don’t hesitate to contact us.

      kind regards,

      David

  68. Hello,
    I wish to start a new business as a sole trader. I work in full time employment at the moment and I wish to stay in it. Is there a chance I could be sent some information in regard to this particular case? Basically I’m wondering how the situation is going to look like in terms of tax, PRSI, PAYE, etc.
    Many thanks,
    Lucas.

    • Hi Luc,

      Thank you for your comment.

      There is no problem in setting up a business while you continue to work in full time employment. You would be required to register as a sole trader and submit tax returns under self assessment to the Revenue Commissioners by October each year.

      With regard to your tax situation – you would be taxed on any profits that the business makes during the year. If the business makes a loss you may be able to offset these losses against your normal PAYE income and reduce your tax liability.

      Assuming that you are single and utilising your standard rate cut of (€32,800) and your tax credits (€3,300) fully you will pay tax at 41%, PRSI 4% and USC 7%.
      Should you require any further information or assistance in setting up your business please do not hesitate to contact us.

      Kind regards,

      David

  69. Hi David

    My girlfriend opened a retail shop last year as a sole trader, registered the business name and is VAT registered as the turnover is greater than €75k.

    She is now considering opening a second shop in a different town just for Christmas. The turnover will be less than €75k so she is considering the following options if these are possible

    Trade under the same name and record VAT under the current registration
    Or
    Register a new Business name and not register for VAT. VAT will be paid on purchases and not on sales. As it’s a retail business the selling price will be the same as competitors who are VAT registered so this should increase profits by approx 10%. A lot of the goods will be imported from UK/France so does this affect the need for VAT registration?

    If option 2 is possible do you need to complete two income tax returns due to trading under two business names and do you need to complete Form TR1 before opening the second shop?

    Thanks in advance
    Darren

    • Hi Darren,

      Thank you for your comment.

      You can carry out the two types of trades under the one sole trader VAT number. But as the two shops will virtually be carrying on the same trade you will need to combine the sales to see if you reach the threshold.

      If the two shops were carrying on different trades, you could argue that the trades are not of the same nature and that you should not combine them. However, this may be difficult if you are trading as a “one man and his van” type business.

      If you require any other assistance please don’t hesitate to contact us.

      Kind regards,

      David

  70. hi David
    i am setting up as a sole trader, basically i will be providing a service for a company and billing them for my time, since i will not be charging them vat i will not need to register for vat. can i still register for vat and clam vat for fuel computer etc

    Regards
    Will

    • Hi Will,

      In general a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €37,500 (in the case of supply of a service) is not obliged to register for VAT. Therefore if you opt not to register for VAT, due to not exceeding the threshold in any twelve month period, then you cannot claim for any VAT paid on business expenses. If you wish to claim the VAT on these expenses you would also have to charge VAT on your sales invoices.

      IF you require any further information please get in contact with us.

      Kind regards,

      David

  71. Hi Orla,

    Im employed as a permatent teacher, and I want to set up a small web-based business, there is a fair chance that it will make very little (or none) money to be honest, but I’d like to give it a try. Are there any implications due to me being already employed? and does my curresnt PRSI contribution cover me? I have registered a business name, and am unsure what to do from here on, I was thinking of setting up as a sole trader! Any help would be great.

    Thanks

    David

    • Hi David,

      Once you start trading you are required to register as a sole trader with the Revenue Commissioners. You do this by submitting form TR1. You will be liable for Income Tax, PRSI and the Universal Social Charge (USC) on your taxable income for the calendar year. The level of tax payable will be determined based on your total income earned during the year, not just your income from the trade.

      The fact that you are currently a PAYE employee will not affect this.

      The following option might also be available to you:

      If your assessable non-PAYE income is less than €3,174 you are not required to register for self assessment and can continue to have the liability on such income assessed within PAYE by means of an adjustment to your Tax Credit Certificate. You would need to let the Revenue know how much additional income you will earn and they will adjust your tax credits accordingly.

      However if your sole trade income is greater than €3,174 you will be required to register as a sole trader as outlined above.

      Kind regards,

      David

  72. Hey Orla,

    My boyfriend recently setted up his own small boutique fashion shop. As he only started, I do go to the shop and give him a hand when I have days off work, but I dont get paid from him. So I’m just wondering does he need to register me as a staff or its ok for me to be in the shop and help out?

    Regards

    Gina

    • Hi Gina,

      Thank you for your comment.

      I don’t see any reason that you would need to be registered as an employee with the Revenue Commissioners if you are not getting paid for the work you are doing and it’s on a voluntary basis. But bear in mind that there may be other reasons you might need to be registered. e.g. insurance cover.

      regards,

      David

  73. Greetings,
    I really do respect your new blogs on Starting / Registering a Sole Trader
    Business in Ireland | Parfrey Murphy Accountants Cork and of course will be back again!
    Cheers..

  74. Hi

    I am sorry for my english and probably silly questions. I would really appriciate if you can help me with these questions.
    I am unemployed person, thinking of opening retail shop. I know there is some help from social welfare called Back to Work Enterprise Allowance which as i checked i would qualified. Do i need to be in a legal structure as a sole trade or can i go into partnership with a (employed) friend and still be able for the allowance? Or is the BTWEA avaiable only for sole trades?
    For how long could we be not register for VAT as a new business??
    Regards
    Caroline

    • Hi Caroline,

      As far as I am aware, the Back to Work Enterprise Allowance is to assist those people currently receiving social welfare payments who wish to be become self employed. I would think that it is unlikely that you would qualify for the allowance working in partnership with your friend but I would suggest getting in contact with your local social welfare office and discussing your options with them. Please be aware also that in order to be granted the allowance, you must not have commenced trading until written approval is received from your local Integrated Development Community.

      In general, a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €75,000 (in the case of supply of goods) or €37,500 (in the case of supply of services) is not obliged to register for VAT, but you can elect to do so if you wish. This would be dependent on how much you expect to earn in your retail store.

      Once you have more information on whether you qualify for the allowance, please feel free to contact us again and we can help you with the setting up of your business.

      Best of luck with your venture!

      Kind regards,

      David

    • Hi Danny,

      There is no problem in setting up a business while you continue to work in full time employment. You would be required to register as a sole trader and submit tax returns under self assessment to the Revenue Commissioners by October each year.

      Should you require any further information or assistance in setting up your business please do not hesitate to contact us.

      Kind regards,

      David.

  75. Hi, I am starting a sole trader business to act as a consultant. I was wondering if you could advise me on the process of doing so? I know I have to fill in the TR1 form but is this before or after I register a business name with the CRO? Also, do you know if I would be able to avail of any state benefits such as social welfare should I be unable to find work as a consultant? Many thanks in advance for your advice.

    • Hi Julie,

      Once you set up a business in Ireland you are required to register with the Revenue Commissioners for Income Tax using form TR1. You can also register for VAT and as an employer at this time if relevant. It would be advisable to register the business name at the same time as completing the Form TR1, otherwise once registered with the Revenue Commissioners you would have to notify them that your are trading under a business name.

      With regard to benefits that are available to you I would suggest contacting your local social welfare office and discussing what options are available to you as they have a number of schemes to help with setting up a new business. You could also get in contact with the local enterprise boards to see if there are any grants that you could avail of.

      Kind regards,

      David.

  76. Hi Orla,
    my name is Juergen and I am german. I live here since 3 month and I want to open a coffeeshop with homemade cakes.
    Also I want to make a service and repairs around the house.
    Must I register both business separately or can I register it in once?

    With kind regards,
    Juergen

    • Hi Juergen,

      Thank you for your comment.

      Once you set up your business you will need to register with the Revenue Commissioners as a sole trader. This will only need to be done once regardless of the number of trades that you carry on. You will then need to report the profit or losses of each trade separately each October when filing your Income Tax return.
      There are a number of articles available to review on our blog regarding setting up a new business which you may find useful.

      Best of luck with your endeavors!

      Kind regards,
      David.

  77. I’m registered as a sole trader in Ireland, working from here, but I provide a variety of services: marketing services to individuals based in the UK (I invoice another sole trader out there who outsources work to me, for example), I’m working a few hours a week as a freelance editor for a company again UK-based (which I invoice them for each month based on an hourly rate) and i’m often hired for short-term jobs at trade shows, as a freelancer who is paid a fixed once-off salary from the UK.

    If I hit the VAT treshold, will I suddenly have to start adding it to all these invoices, therefore upping the prices they are used to and making me non-competitive and at risk of losing business? What happens in cases where I’m offered x amount for a short term contract, take it or leave it, I can’t suddenly add 21%… Would that not be an incentive to keep under the threshold and in a way limit the potential of a business because adding VAT could scare off my regular customers?

    Sorry if this seems silly but I’m really in the dark about VAT, especially when invoicing abroad.

    • Hi Helena,

      Thank you for your comment.

      In general a business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €37,500 (in the case of supply of services) is not obliged to register for VAT. Once this threshold is exceeded, you are required to charge VAT on you services and pay that over to the Revenue Commissioners. At this point it would be at your discretion as to whether you charge VAT of 23% on your current prices or eat into your margin and take the hit of 23%.

      With regard to your situation, where you provide services to the UK, once these customers are a registered business and you have verified their VAT number, you can zero rate the service and not charge VAT. This also applies to any other business customer who is located in the European Union. If the customer is a private individual not registered for VAT, then VAT at the standard rate would apply.

      If you require any further assistance please do not hesitate to contact us.

      Regards,
      David.

  78. Hello,
    My soon wife to be is an Irish Sign Language interpreter and has worked through agencies for a number of years. I currently pay the higher rate of tax and someone has told me that if she was to setup as a sole trader it would benefit me also. I cannot seem to get a straight answer on this. Can you help?

    kind regards,
    Joseph

    • Hi Joseph,

      We would require more information to determine if there would be any benefit to your partner becoming a sole trader. Initially the only benefit that there would be is that any expenses incurred that related to the trade of your partner could be deducted in arriving at her taxable income. It is unlikely that you will benefit from this set-up but please contact us on 021-4310266 or pm@parfreymurphy.ie and we can discuss the best and most tax-efficient options for all parties.

      Kind regards,

      David

  79. Hi,

    I have recently registered a business name. I wish to run it just as a part-time business. I have a separate full time job and a part-time job. Tax office suggested me to submit Form-11 and since last 3 years I have been submitting Form-11. In the above posts, it is mentioned that if anybody wants to start a business as a sole trader, he/she must register with the tax office by submitting TR1 form. In my case, since I already submit my Tax Returns through Form-11, do I still need to register for tax using TR1 form?

    Thanks in advance,
    Jer

    • Hi Jer,

      Thank you for your comment.

      Normally when you start trading you would register with the Revenue Commissioners by filing form TR1. Then each October you would file your tax return which is also referred to as Form 11. From the information your supplied, it would suggest that, you are already registered as a sole trade and do not need to file Form TR1.

      Kind regards,

      David

  80. Hi,

    I am in the process of setting up as a sole trader I plan to sell crafts (I doubt their is huge profit to be made especially in the first year I understand that I can work as well as being a sole trader once I register with the Revenue. My question would be I plan to work at my business from my home (which is a council house I am renting from my local council as a tenant) My question before I register as a sole trader and the Revenue can I run a home based business in a council house or do I need to get permission from the local authorities before I go ahead and set everything up?

    Any advice would be greatfully appreciated

    Caroline x

    • Hi Caroline,

      I would suggest that you contact your local authority to ensure that there is no restriction in using your council house as a place of business. Once you have established that you can operate your business from home, you need to submit form TR1 to the Revenue Commissioners to register as a sole trader. Than each October you will be required to submit your income tax return for the preceding tax year.

      Kind regards,

      David.

  81. Hi David

    If I register as a sole trader delivering consultancy services to a UK company (I will be invoicing the UK company for services I will be delivering in Ireland) I understand I do not have to charge VAT?

    Is this correct?
    Jason

    • Hi Jason,

      You don’t charge VAT if you are not VAT registered or if you are VAT registered and the UK company is VAT registered and provides you with their VAT number.

      Kind regards,
      Fiona

  82. Hi,

    I have a question in relation to a sole trader business type. My girlfriend wants to set up a small company providing services as a freelancer photo retouching. She also wants to purchase a new computer. My question is: Can she get any reimbursement or an exemption from a tax? Many companies treat all computer equipment as a cost and thanks to it they may reduce its tax liability. Is the same policy relates to sole trader? We both have been living permanently in Ireland.

    Kind regards,

    Radek

    • Hi Radek,

      Thank you for your comment.

      If your girlfriend purchases a computer for use in the business then she can claim back the VAT on the purchase of the computer, if she is registered for VAT. A new computer should really be regarded as capital expenditure and therefore she would be entitled to a capital allowance deduction of 12.5% each year against the profits she makes in the business.

      Kind regards,

      David.

  83. What information should an invoice by a sole trader (who is not registered for VAT) include? Would the following be acceptable:

    Name, Address, Telephone number/email address
    PPS number
    the customer’s name and address,
    description of the service and the cost of that service.
    Payment details / terms

    • Hi Sean,

      Thank you for your comment.

      The following are the minimum items that should appear on your invoice – trading name and address, invoice number, name and address of customer, description of service provided and cost of the service.

      Kind regards,

      David

  84. Can I start up a sole trade business and work as employee in another company at the same time..? I’m planning to open my own sole trader business but I wouldn’t be able to leave my job as I need it to sponsor my new sole trader business at the start.I’m expecting that Income of my new business would be very small at the start.

    Also in case I would loose my current job and sole trader business wouldn’t work out would I still have a right to apply for social welfare..?

    Example:
    I have a freind who was a sole trader and his business bankrupt and he wasn’t allowed to apply for social welfare for 2 years since he closed his business.

    Very much appreciate your help..

    Many Thanks,
    Tatiana.

    • Hi Trtiana,

      Thank you for your comment.

      There is no problem in setting up a business while you continue to work in full time employment. You would be required to register as a sole trader, using Form TR1, and submit tax returns under self assessment to the Revenue Commissioners by October each year.

      You would need to contact the Department of Social Protection with regard to wheather you would be entitled to claim job-seekers benefit should you lose your full time job. The fact that you are working in your own business might be seen as a restriction, but you might be entitled to other benefits such as the Back to Work Enterprise Allowance.

      Kind regards,

      David.

  85. Hi,
    Just want to know what happens after the TR1 form is filled out and sent to Revenue District Office.
    Can i go online and complete my tax affairs.
    I currently rent a house and make a very small income in Photography.
    I Also have a full time job.
    Many thanks,
    Owen.

    • Hi Owen,

      Once you have submitted Form TR1 to the Revenue Commissioners, it usually takes up to 10 working days to be processed. You could call them to check that they received the documentations and that you now registered as a sole trader. Once you are registered I would suggest registering with ROS (Revenue Online System) and then you will be able to file all relevant tax returns on line.

      If you require any assistance in preparing your sole trade accounts or indeed filing your tax returns, please get in contact with us on 021 4310266.

      Kind regards,

      David.

  86. Hi, I am considering taking a voluntary redundancy package from my current employment and starting up my own business. I’d like to know how ” the seed capital scheme” works. say i were to invest part or all of my redundancy(say 50k), how much income tax could i claim back or is there a better scheme available for this sort of move?

    • Hi Barry,

      Thank you for your comment.

      I would suggest getting in touch with Enterprise Ireland (please see link here) to discuss your proposed business venture. There are number of conditions that would need to be met before you would be eligible for the scheme such as the type of activities of the company.

      If you require any further assistance please get in touch with us at 021 4310266.

      Kind regards,

      David.

  87. Hi There,

    I am working as an occupational Therapist and i am going to start my private practice in and around my area. my question is:

    1. Do I need to register for Tax TR1 even though I am currently in Payroll?

    2. Will my service be vat registered because my existing salary is over 37500 mark?

    3. I got my insurance and registration for private practise and all other office expenses and I don’t know how many will be using the service and how much of my money out (expenses) will be refunded back to me by revenue?

    I really appreciate if you answer all the above questions

    Thanks

    Ahamed

    • Hi Ahamed,

      Thank you for your comment.

      When you start up a new business you are required to register as a sole trader using form TR1. You can continue to be employed in your current job and be paid through payroll.

      Your obligation to register for VAT will be based on the turnover or sales of your business. Therefore, if your turnover, in any twelve month period, does not exceed or is not likely to exceed €37,500 (in the case of supply of services) you are not obliged to register for VAT. Once this threshold is exceeded, you are required to charge VAT on you services and pay that over to the Revenue Commissioners.

      Any expenses that you incur for the purposes of the business are tax deductible and can be used in calculating the profit or loss the business make.

      Should you require any assistance in your new venture please do get in touch with us.

      Kind regards,

      David.

  88. Hi,

    I have a question in relation to a sole trader business. My wife, a hairstylist with 7 years exp, has decided to open her own business and having done a good bit of research and a read through your blog/comments amongst others, we reckon we are heading in the right direction as to what is step-by-step of business set-up (as in register with CRO, open business bank account, register for tax (have to look into this more this is registering with the Revenue & TR1 form which i presume can be done online) but what i would like to ask is what is the benefits or indeed is it necessary to become VAT registered for this type of business (Hair Salon)
    Many thanks in advance and would appreciate any help.

    Kieran

    • Hi Kieran,

      Thank you for your comment – it’s always great to hear of entrepreneurs interested in setting up their own business!

      In relation to your query regarding registering for VAT, your wife will need to estimate how much she expects to earn for the 12 month period from start up. For services, where turnover exceeds €37,500 in any 12 month period a business is obliged to register for VAT. If your wife does not expect sales of this level she instead has an option as to whether or not she wants to elect to register. It may be difficult to estimate the first year’s turnover until the business is established so if she decides not to register, she should monitor the sales carefully to ensure sales do not exceed the threshold.

      The benefits of registering for VAT are generally favourable to start-up businesses with large initial spend while the business establishes itself, e.g. large costs on set-up, advertising, marketing, etc., as VAT can be reclaimed on purchase input costs when the business may not be making large sales. The VAT refunds earned can be valuable from a cashflow point of view.

      Without more details on your wife’s expectations, we cannot advise further. Please feel free to contact us at any time should you wish to discuss the above.

      Kind Regards,

      David

  89. Hi David,

    I am Portuguese citizen currently working in a full-time work. I would like to setup a small business sole trader in Dublin (online ebay selling). I was reading and saw that I should submit the TR1 form to the Revenue office. I was wondering if I could operate that from home without problems and can run that while working as employee.

    Thanks a million

    Bruno

    • Hi Bruno,

      You will need to submit a Form TR1 to register for income tax purposes in respect of your sole trade. Your sole trade business can be run as a side line while you work full time as an employee.

      Once registered for income tax purposes with Revenue you will be obliged to file annual income tax returns with Revenue. This returns are due each October.

      Kind regards,

      David

  90. Hi, I am an Irish consultant working in France for 6 months, I may not be resident in Ireland for a full 6 months am I liable for taxes there? Also, with regard to the double tax treaty, how does this work? Do I need to register for tax in France also? Thanks.

    • Hi Sinead,

      Depending on your Irish tax residency status prior to working in France for six months you may be liable to Irish taxes on your French sole trade profits (assuming you are a sole trader). You may also be taxed on these profits in France but the double tax treaty enables an individual to claim a tax credit in his/her country of residence (Ireland) in respect of the tax paid in France to avoid the same profits being taxed twice.

      To give a more precise answer we would need more specific information on your personal circumstances and place of residence prior to working in France.

      Feel free to contact us should you wish to discuss the above.

      Kind regards,

      David.

      • I have a strange situation that accountants (explained it to three of them) seem not to be able to help me with. One of them told me straight out that they have no idea

        I am a non resident of Ireland, but am a citizen
        I am not domiciled in Ireland
        My contract is with a company registered in Ireland
        I am a contractor to this company, not a PRSI worker
        Within the contract it states my address and place of work as not being Ireland (another country)
        I do not have to be registered as a sole trader in the other country I am based in. The rule there means I declare all income (capital gains, rental etc) and pay on the lump sum.
        That country does not have a double tax agreement with Ireland

        Last year I had to come back to Ireland on a few business trips. The company covered me with a per diem. It was not strictly part of my job or responsibilities as in my contract, but for certain reasons, I needed to be in Ireland

        In total I spent a number of periods in Ireland in 2012. A total 131 days (including weekends and a couple of weeks holiday I took)

        I am not a saint, but also I do not want to be a tax dodger/evader, so I’ ll pay if I owe. Conversely though I do not want to walk into the revenue commissioners completely blind of what my situation and liability is, and be forced to pay based only on their assessment

        I tried to find the relevant forms to try and understand what I should be liable for, but the forms do not seem to cover my siutation
        Any help would be appreciated
        Conor

  91. Hi David

    Can I have several sole trading business names at the same time? And file a single combined tax return for both businesses each tax year?

    Or do I need to file tax returns on each business name separately? Is there any way to group for tax filing purposes? My purpose in combining the two is to simplify the administration for myself – I will be working from one premises, one phoneline, one set of bills – with two websites, each offering design/project management service but targeting different client markets.

    Or could I resister a business as a single word name, for example “Savannah”, pay tax under the name “Savannah”? But promote the business online via the name “Savannah Designs” on one website and also “Savannah Books” on another website?

    I am in full time PAYE employment in design.

    I am registered as a sole trader in design/training under a business name and file tax returns annually on this independent business.

    Any help would be very much appreociated!
    Deirdre

  92. Hi, great website! Could you help me with my query, together with my friend, we want to set up an online based business as a partnership. The problem is, that my business partner lives and works in another EU country but we would like to trade together as a one firm. I am based in Ireland, working full-time. Is it even possible to register a partnership in Ireland if one of the business partners doesn’t live in Ireland? I will be grateful for your advice, thank you.

    • Hi Louisa,

      Thank you for your comment.

      According to the partnership tax returns it appears that non resident partners can exist in a partnership which has been registered in Ireland.

      Best of luck in your new business.

      kind regards,

      David.

  93. Hi, I am registered as self employed photographer in other EU Country, but i come to Ireland and do some Photography work here as well. Do i have to register in Ireland as well? Or is it enough to have contract signed between me and client, and then pay tax in country i am already registered as self employed?
    Thank you!

    • Hi Kitija,

      Thank you for your comment.

      The extent of an individual’s liability to Irish income tax depends on:
      • Whether he/she is resident in Ireland
      • Whether he/she is ordinarily resident in Ireland
      • Whether he/she is domiciled in Ireland

      An individual is regarded as resident in Ireland for a particular tax year if he/she is present in the State:
      • at any one time or several times in the year for a period in the whole amounting to 183 days or more, or
      • at any one time or several times in the year and the preceding year for a period in the whole amounting to 280 days or more.

      However he/she is not regarded as resident for any tax year in which he/she spends a period in the whole amounting to 30 days or less in the State.

      An individual is considered ordinarily resident in Ireland for a year of assessment if he has been resident for each of the three years of assessment preceding that year.

      In general terms, a person is domiciled in the country of which he/she is a national and in which he/she spends the majority of his/her life.

      In summary unless you spend the necessary number of days in Ireland in any given tax year you will not become Irish tax resident and should not be obliged to register for Irish income tax. We would need detailed information on your personal circumstances before giving any specific advice on your obligation to register for tax purposes.

      Kind regards,

      David.

  94. Hi,

    My question is regarding the VAT registration. I would like to set up a sole trade company to sell goods online, I do not think my revenues will exceed €75,000 within the first 12 months. I don’t know which option is more interesting for me?

    – If VAT reg. can I claim VAT back on everything I buy for the company, such as material/stationary needed to start the company + goods I will buy to resell?
    – If VAT reg. Can I only claim VAT back if bought from companies in Ireland or from anywhere?
    – If VAT reg. will my product be more expensive for clients because I will have to charge VAT on it?
    – If non VAT reg. I don’t charge VAT to my clients, right?

    Thanks a mil for your help,
    Regards,

    • Hi,

      Thank you for your comment.

      If you register for VAT you will have to charge VAT on your sales to clients/customers and in turn you can claim back Irish VAT on any purchases which are for the purpose of your business. This will include items such as, goods for resale, stationary, light, telephone, professional fees etc. If you purchase goods form a country within the EU the purchase maybe zero rated for VAT purposes, once you supply them with your Irish VAT number. Any goods purchased from outside the EU will have VAT applied by customs on import. The VAT paid on these goods can be reclaimed in your VAT return as if it were a normal purchase.

      If you do not register for VAT you will not be obliged to charge VAT on your sales to clients/customers.

      I hope the above will be of assistance to you. If you require any further information in setting up your business please feel free to contact us.

      Kind regards,

      David.

  95. Hello Orla,

    I live and work in full time employment Northern Ireland. Is it possible for me to set up as a sole trader in the Republic of Ireland while still being an employee in the North? If so is there anything peculiar that I should be aware of? I pay tax in the north. I have an address that I can operate from in ROI.

    Many Thanks

    Robert

    • Hi Robert,

      Thank you for your comment. You would normally only register as a sole trade in the Republic of Ireland if you are resident here.

      Kind regards,

      David.

  96. Hi,
    I’m providing a software company services: hiring, team management, and development direction. As a sole trader can I claim Research and Development allowances for the computing equipment I need to buy to support this role? Would I be better to incorporate and invoice from a company where I can put the cost down as capital expense?

    I was advised as this is going to be a short term role where I will earn less that £55k that it is best to go down the sole trader route.

    Cheers
    Mike

    • Hi Mike,

      Thank you for your comment.

      The research and development (R&D) credit is only available to companies who seek to achieve a technological advancement so simply purchasing computing equipment would not qualify a company for the R&D tax credit.

      If the role is short term it may be best to operate as a sole trader, as setting up, running and subsequently dissolving a company can be quite expensive in comparison to a sole trader.

      kind regards,

      David.

  97. Hi,

    My spouse is a green card holder so I am here on a stamp 3.
    I wish to apply for spousal work permit for which I am supposed to have a job contract.

    Now the company in context has queried me if I have PPS number and if I am allowed to register as a sole trader and for VAT. I do not think for taking a contractual job I have to register myself as a sole trader and for VAT.

    Could you share your views on this please.

    Thanks,
    Anu

    • Hi Anu,

      Thank you for your comment.

      I would not be familiar with regard to visa conditions of yourself and your spouse. I would suggest that you discuss the situation with the relevant department or an immigration specialist.

      Normally if a person is not employed my the company but is performing work for a company they would need to register as a sole trader. This can be done using Form TR1. You can also register for VAT at this time if you anticipate that your turnover for any 12 month period will be in excess of €35,000 for Services and €75,000 for goods.

      Kind regards,

      David.

  98. Hello,
    have a question:
    Do I need to register for VAT if I want to franchise and resell goods from EU?
    Because you need to register VAT if you want to resell goods from EU, am i right?
    Any chance to avoid registering VAT if I want to resell good from EU?
    Thank you

    • Hi Robert,

      Thank you for your comment.

      To be able to answer your question we would need to know what your estimated turnover will be for a 12 month period and whom your will be selling the supplying the goods to – non registered or registered individuals?

      kind regards,

      David.

      • Hello David,
        thanks for reply.

        My 12 month turnover would be less than 75000 (around 34000)
        and there is difference whom to sell? Initially was thinking selling to schools (I suppose they are VAT registered) but can sell to not registered individuals.

        regards
        Robert

  99. Hi there,

    I was hoping you could clarify a situation for me, I am currently trading as a sole trader. My income is only coming from one source, both a service chage weekly and a commission monthly, is this allowable for both me and the company?

    Also, if I wished to look to change accountants from who I currently deal with, how do I do this?… My first tax return is due Oct ’13.

    Thanks in advance!

  100. hi,
    i am in the process of setting up an online store to sell clothing that i make myself. because i am starting small i will be using paypal to accept credit card payments and my question is, are paypal receipts sufficient to use for my tax returns. Usually if you sell an item via paypal you get an emailed receipt but will this be enough?

    i do not expect to have a large turnover in the first year so i do not plan to register for vat.
    thanks in advance,
    maggie

    • Hi Maggie,

      Thank you for your comment.

      Yes, the receipt that is emailed to you would suffice as evidence of the sale. I believe you should also be able to get a statement from paypal that you could retain on file. We would have a number of clients who would use paypal on a regular basis for selling some of their products.

      Kind regards,

      David.

  101. Hi there
    Wondering if you could tell me how many years account does one need to keep. Is it 7 years (ie 2005 would be the oldest accounts files one needs to keep)

    Many thanks in advance

    David

  102. Hi,
    i am setting up e commerce business as sole trade.
    Goods buying from EU wholesaler which are with VAT, as im not planning to go over 35000 i am not required to registered for VAT.
    Do i have to pay any payments to Revenue?( i registered as sole trade with revenue)
    Do i have to open my business account or can use current acc if im doing business true Paypal?

    Kind Regards

    • Hi Laine,

      If you do not register for VAT you will not be required to make any VAT payments to the Revenue Commissioners. The only payment that you may need to make will be that of Income Tax. It would be recommended to open a business accounts, so that you can easy keep track of your business expenses.

      Kind regards,

      David.

  103. Hi,
    Im currently working a full time job but am going to set up as a sole trader for extra income. I know already I wont be required to register for VAT but I am a bit unclear about how the income tax/prsi/paye systems work because now I will have 2 sources of income. Any help you can give in this matter would be great. Thank you in advance for your time.

    • Hi Gerard,

      Thank you for your comment.

      Now that you are a sole trader you are required to submit an income tax return by 31 October each year. Therefore, for the tax year 2013 you will be required to submit your tax return by 31 October 2014. When submitting your tax return you will report all your income from your full time job and any profit/loss that you make on your sole trade business and your taxes will be calculated based on this information.

      As your employer will have continued to deduct income tax on your PAYE income – this will be deducted from your total tax due on your tax return and you will only be required to pay any additional tax that is due.

      Best of luck in your new business venture and if you require any assistance please get in contact with us.

      Kind regards,

      David

  104. Hello

    I would like to register as a sole trader, now I have few questions regarding the subject:

    1)Is there any amounts thats tax free
    2)If I dont have a bussiness address, can I use my residential address if I am renting as the bussiness address
    3)Whats the limit of writing of the income against the tax, say if i want to buy a car towards the bussiness, can i write the cost of it off
    4)On the form TR1 there is a question regarding an estimate income for 12 months of trading, if I will give bigger amount then my actual income is then will I be taxed on that
    5)When you register as a sole trader is there any registration number that you receive
    6)If I will register say mid year, and I am due for tax by the 31 of October, do I still have to pay for the full year

    • Hi Luka,

      Thank you for your comment.

      To register as a sole trade you need to file form TR1 with the Revenue Commissioners. Once you are registered you are then required to file an Income Tax return for each calendar year. The deadline for filing the Income Tax return is 31 October each year.

      I will now answer each of your questions below:

      1. All income is subject to tax at either 20% or 41% (plus Pay Related Social Insurance and Universal Social Charge). Assuming you are a single person, any income in excess of €32,800 will be charged at 41%. There is no tax free allowance/amount, but there is a tax credit that is deducted from any tax calculated on your income. The tax credit for a single person is €1,650.

      2. Your business address can be your residential address, but bear in mind that your business activity should be conducted from that address.

      3. Expenses that are wholly and exclusively for the purposes of the business can be deducted from your income when arriving at your taxable profit. But there are some exemptions to this – especially with regard to items of capital nature (e.g. Motor Vehicles, Office Equipment etc…) Therefore if you purchase a Motor Vehicle for use in the business only 12.5% (Capital allowance) of the cost, which is dependent on the CO2 emissions of the car, can be claimed each year.

      4. The estimated income referred to on Form TR1 is only an estimate. You will be taxed on what you actually receive during the year and not this estimate.

      5. Your sole trade registration number is your current PPS number.

      6. If you register in say mid 2013 – you will be required to file an income tax return for the tax year 2013 on or before 31 October 2014. This tax return will outline all your income form 1 January 2013 to 31 December 2013.

      I hope the above is of assistance to you. If you require any further assistance please get in contact with us.

      Kind regards,

      David.

  105. Hello.
    I’m already registered as sole trader, I did it 2 months ago but I didnt start the activity yet and I was working full time for a company also. I have been dismissed and I would like to know if Im entitle to ask for any benefir from the social welfare. I’ve been working for more than 2 years in that company.

    Thank you in advance for your time.

    • Hi Roberto,

      I would suggest discussing your situation with your local department of social protection office. There are a number of conditions that must be satisfied before you are entitled to claim Job-seekers Benefit (read here) – the main one being that you must be available for work. Therefore if you are an active sole trader, you might not be meeting this requirement.

      Kind regards,

      David.

  106. Hi

    Im currently working a full time job but am going to set up as a sole trader for extra income.I am going to sell goods online through my own website.

    I know already I wont be required to register for VAT as i dont expect to make over £75,000 in my first year.After reading through your helpful advice on this site, i understand that i should register as a sole trader and I should submit the TR1 form to the Revenue office at the end of the tax year.I also understand that my employer will have continued to deduct income tax on my PAYE income.

    As an example,lets say i earn £30,000 from my day job and i earn £30,000 from my online sales.As im not registered for vat and my employer pays my employee tax, what tax and how much will i owe after i submit the TR1 form from the example i have given.

    Any advice is much appreciated.

    Kind Regards,

    Aidan

    • Hi Aidan,

      Thank you for your comment above.

      As you are aware you only need to register for VAT if your turnover, in any twelve month period, exceeds or is likely to exceed €75,000 for goods or €37,500 for services. Therefore, as a sole trader your will only be liable for Income Tax, Universal Social Charge and Pay Related Social Insurance (PRSI) on any profits the business makes during the year. You will be required to submit your Income Tax return by 31 October each year.

      Without a detailed knowledge of your particular personal circumstances, it would be hard to estimate the level of taxes you will pay. Assuming you are a single person, any income in excess of €32,800 will be taxed at the higher rate of 41%. Therefore the majority of your profit (income less allowable expenses) will be taxed at higher rate of 52%. (Income Tax, USC and PRSI)

      I hope the above is of some assistance to you. Please get in contact with us, if you require any further information.

      Kind regards,

      David.

  107. Hi

    I’m planning to set an online shop in Ireland. I’m in the process of registering my business name and registering for tax. However I don’t know how long I will be staying in Ireland and plan to move to the UK. So how do I move an online business? I will also be on the Back to work allowance and know if I move I will no longer be entitled to this scheme.

    Thanks

    Summer

    • Hi Summer,

      Thank you for your comment.

      In general terms, the extent of an individual’s liability to Irish income tax depends on whether the person is resident in Ireland. As a sole trader when you leave Ireland you can deregister for income tax purposes in Ireland and seek assistance from a taxation advisor in the UK about becoming registered for tax purposes in the UK.

      Kind regards,

      David

  108. Hi Guys,
    Firstly – A very big thank you for all your open source information on the site. Fantastic service. I’ve been digging through Enterprise Ireland, Intertrade Ireland and the Irish revenue site and it seems to be all there but I’m in at the deep end and it’s all a bit overwhelming. Your site is fantastic!

    · I have an opportunity to sell a product in the UK. The product currently comes to a currently standing VAT registered sole trader in Ireland from Germany.

    · I will purchase the product “here” and sell it to a combination of VAT registered business consumers and also non VAT registered consumers in the UK. The actual breakdown of the VAT/non VAT registered customers is not clear just yet.

    · My forecasted turnover may stretch to 20-30,000€ however this is not clear just yet

    · I hope to operate as a sole trader on my own initially for at least the next 12-18 months from September when I hope to start I will not be in gainful employment elsewhere.

    · It will be a mixture of product and service provided to the end user

    · I will have and on-going contract based and other work in Ireland in addition to the UK operation.

    I have a few queries/comments based around a summary of what I have found out so far as follows.

    · Within the EU dispatches between VAT registered businesses are not subject to VAT and can be invoiced with the 0% VAT provided both valid TAX numbers are on the invoice? So if I sell to a business in UK this is okay. Does this also hold true when I exchange the product between my VAT registered sole trader business and the Irish VAT registered sole trader holder of the product? So the link from IRE to UK via me is not subject to VAT if all are registered.

    · I understand that if my turnover is less than 37,500/75,000€ for service/product I’m not obliged to register for VAT but it does seem to make sense to do so anyway.

    · If the customer is not registered and I’m registered here then the Irish rate of VAT applies appropriate for goods/service on the invoice to the customer

    · I do not need to register for PAYE/PRSI if I do not employ anyone. However “PAYE and PRSI contributions do not need to be paid when proprietors or partners draw cash (although they do catch up later)”. Can you possibly elaborate on this?

    · If I do have gainful employment elsewhere both relevant tax and income information must be declared as I can’t use my tax credits independently for both J

    So once I have registered my business name, and filled out the TR1 form registering me for VAT as a sole trader – I’m good to go?

    Any help would be greatly appreciated, Thanking you in advance

    • Hi there,

      Please note that if you are registered for VAT you do not charge VAT to VAT registered businesses in the EU. However, you must charge VAT to Irish businesses unless they have a Section 56 authorisation.

      A sole trader (with no employees) pays Income Tax, PRSI and USC on the profit the business makes and not on the drawings.

      Once you have registered your business name with the Companies Registration Office and the TR1 is registered with the Revenue Commissioners you are ready to start trading.

      Regards,

      Maria

  109. Hi, I’m an Italian professional currently employed in Dublin on a full time job, and I would like to register as a sole trader in order to startup a web agency.

    I have a couple of questions/doubts about this, and I hope you can help me (thanks in advance):

    1. Assuming that I’m currently earing 40.000 eur from my current job, this means that all of my incomes coming from the sole trader activity will be taxed at the higher rate? or those incomes are considered separately from my current earnings?

    2. Selling websites + web related activities can be considered as selling good or (as I think) will be considered as selling services?

    3. Due to the nature of the activity, I will have to sell our services to people from all over the EU/World. How it works for VAT? due to the fact that I’m not applying VAT I can sell to other countries without applying it?

    4. It is slightly possible that some of the works could be assigned to external freelance, that will emit a bill to my web agency. The amount I’ll pay for this services can be considered as allowable expenses?

    5. How much can cost x year mantain a sole trader activity? (accountant, registering it).

    Thanks in advance,

    Alex

    • Hi Alex,

      We have reviewed your queries and our answers are as follows:

      1. Yes, if you are earning €40,000 from your current job then your sole trade activity will be taxed at the higher rate.

      2. Selling websites is considered as selling services.

      3. If you are not registered for VAT then you do not charge VAT.

      4. Any expenses wholly and exclusively incurred in running your business are tax allowable.

      5. If you provide us with your contact details, we will call you to discuss.

      Regards,

      Maria Fahy

  110. hi there,

    I registered as a sole trader by submitting the TR1 form. I also registered for VAT as I was unsure what my income will be and if i would be providing services in Ireland or other countries.

    I am contracting for a US/UK based company, providing telecoms consultancy. I am based here but clients are in the EU.

    I know I don’t need to charge VAT but do I need to make a VAT return as I registered?

    Thanks,

    Garret

    • Hi Garret,

      Thank you for your comment.

      As you are registered for VAT you are required to file a VAT return on a bi monthly basis even if you are not charging VAT.

      Kind regards,

      David.

  111. Hi,

    I have just registered a business name with the CRO and as a sole trader, My business involves service and retail. Selling parts within Ireland and UK on my website and EBay and providing repair service locally (mostly non business clients). I wish to buy my parts from China,Korea and resell them here and use them as part of my local repair service. I have checked the taric and my parts are @ 0% duty, but are susceptible to VAT @ 23% on entry to Ireland. My question is: Should i register for VAT now or wait to/if i hit the 35k/75k barrier as I cant understand the benefits! and that i would then have to add VAT on my labor charges + lose work to private individuals as my charge would be too expensive. Site is very informative thank you, and would appreciate any advice or pointers

    regards will

    • Hi Will,

      To answer your query accurately we would require some more information on your business. If you would like to forward your details to us, we will contact you directly to discuss the best way forward for your business.

  112. hi,
    i have just set up as a sole trader and yesterday i took a look through the tax return form just to familiarise myself with the process. where you declare your income/expenditures the form is split up into separate trades and im wondering how are different trades defined?

    For eg. with my business i make clothing which i will be selling from my website. but i also would like to source accessories & vintage clothing to resell which i wouldnt be manufacturing in-house. Are these classed as separate trades? & if not, then what is?

    i just want to be sure im keeping separate records if these figures will need to split out at the end of the year.

    thanks in advance,
    margaret

    • Hi Margaret,

      The answers to your queries are not straightforward. If you would like to forward your details to us we can contact you to discuss your queries in more detail.

  113. Hello,
    I am a sole trader and have been operating as such for over a year now. I was under the impression that I became VAT registered when I became a sole trader and that I could use my PPS number as a VAT number! I realize now that this is not the case.
    Recently I bought a medical device and was asked if I had a VAT number, which I said I did. Obviously the price was considerably less with the VAT number.
    Now, I don’t make any money really. Since becoming a sole trader and starting on the scheme work has been minimal and business in my sector is slow.
    I figured I would register for VAT as after I purchased the device, the distributor found that I was not registered(as did I)
    Is there any benefit for me to register? I’m trying to understand this whole TAX thing but it seems complex and convoluted.
    Should I register anyhow!? How will that effect me later with returns etc…
    Regards
    brian

    • Hi Brian,

      Depending on the services provided by you and your level of expected turnover, i.e. normally for services VAT threshold is €37,500, you may or may not have to register for VAT. If you register for VAT, you will have to charge VAT on invoices raised by you. You would also be required to file VAT Returns accordingly even if the VAT Returns are NIL.

      If you would like to discuss this issue further please forward your contact details and we will contact you.

  114. Hi there, I’m in the process of setting up my business. (Please see my website) I registered as a sole trader but want to employ people on the basis that they work for themselves, kinda like an agency. Is this possible to do as a sole trader or will I need to become a company?
    I also want to register for VAT even although I don’t expect to exceed the threshold for year one. Is there any point in this.
    As I am registered as a sole trader, is my business a separate entity? I’m just looking for a bit of advice in general as I feel my business has a lot of potential. Would you recommend that I start the business as a sole trader or register differently.
    Any advice would be much appreciated,
    Kind regards,

    Steven.

    • Hi Steven,

      It is not straightforward to engage people as subcontractors as in fact in reality they may be employees and so would have to be registered as employees of the business. PAYE/PRSI should be applied to payments made to them. Please see “Code of Practices for determining employment or self employment status of individuals” on the Revenue’s website.

      If you elect to register for VAT now and deregister later there may be a clawback from the Revenue Commissioners.

      As a sole trader, your business is not a separate entity. This only applies to private limited companies.

      There are many factors which determine the best structure for a business for e.g. turnover, expenses etc

      If you would like to send us your details we will call you to discuss the best structure for your business.

      Kind Regards,

      Maria Fahy

  115. Hi,
    Can i just say what a fantastic site,no need for me to send myself to a course i just joined to look for ans etc… I think i’ll can get them on this,,, Anyway ive loads questions if i could get them answered it be great/////////

    Im employed and want to keep the job but also want to start up my own wee business,it be small and want to know what all i have to do and what way to go about it……

    To get straight to the point i’ll be buyin stuff online,cash’n’carry,wholesellers etc and selling on 2 shops/chippers/door 2 door in my aera-more and likely 90% of all my stuff probably be for cash apart from few shops here and there.

    So could you tell me what way it best about setting up and what all i have to do to get started,

    Thanking you,

    • Hi There,

      To advise you accurately on the best way forward for setting up your business we would need some more information from you, for e.g. projected turnover, income, types of products being sold etc.

      If you provide me with your details, we will call you to discuss matters in more detail.

      Kind Regards,

      Maria

  116. Hi there

    This is a great site so thank you.

    I am a trained nail tecnician but have not worked at it here in Ireland. I have been recruited by a beauty salon who is offering me a 3 month contract as a sole trader to rent a space in the salon. Will it be worth my while to register as a sole trader if i am not even assured of a profitable income?

    My second question is, if i do register as a sole trader, how will that affect my husbands tax bracket as i am a stay at home mum and he is on a lower tax bracket?

    Your advice would be really helpful and greatly appreciated.

    • Hi there,

      Regardless of whether you make a profit or not from your business you must register for taxes with the Revenue Commissioners.

      The effect on your husbands tax bracket depends on how the standard rate band is allocated between you and your husband. Normally the higher earning spouse will have the higher portion of the standard rate band i.e. €41,800. The minimum the other spouse must keep is €23,800. We would need to see a copy of your husband’s 2013 Notice of Tax Credits before we can advise further on this query as he may also be in receipt of the home carer’s tax credit which he may lose depending on the level of your income.

      If you would like to discuss this further please forward your details to us and we will contact you.

  117. Hi,i just thinking about my own business.1.if i want register a sole trader,and i want do shoes and handbag repair services ,but i just take the orders,and after when is done i will give back to my customers.I want work with one sole trader,his will sell the services for my,so i gona sell that to my custumers after.2.it is good way?could i make this?3.could you tell me step by step what i need and if i give him litle space in my oficce ,him could work there?4.if i getting social welf.allowance,from first day when i start to be a sole trader they will cut it?thank you so much

    • Hi Sandra,

      To register as a sole trader you will need to complete the relevant Form TR1. The form is available on the Revenue Commissioners website http://www.revenue.ie. Once registered you will need to maintain books and records and prepare annual accounts and income tax returns. If you wish to discuss the matter in further detail please contact our office on 021 4310266.

      In relation to the social welfare allowance, it may be discontinued. It would depend on what allowance you are currently claiming. I would advise you to contact your local Department of Social Protection office to discuss your options.

      Kind regards,

      Cathy

  118. Very helpful resource, thank you very much. I have a question though, if you don’t mind helping further.

    I’m registering as a sole trader because I’m working as a freelance artist. I’ll be earning under the threshold for tax registration, but would it still be worthwhile to register so I’d be able to claim tax back on certain expenses.
    (eg. the laptop I purchased specifically so I could get work done)

    I’ve already received payment for 2 months of work which I did not receive VAT on, so would it just end up costing me money overall if I signed up and had to pay VAT on this?

    Thank you very much,
    Gary

    • Hi Gary,

      Certain traders whose turnover in a continuous 12 month period is not likely to exceed the relevant specified limits shall not be accountable persons and so do not have to register for VAT purposes. However these traders can if they wish elect to register for VAT. The trader will then be obliged to charge VAT on his sales (this may be a disadvantage if his customers are largely private individuals who cannot reclaim the VAT charged) but will have the advantage of being entitled to claim VAT input credits on his purchases. It should be noted that if you elect to register, VAT input credits will only be available for those expenses incurred following registration.

      If you do register and wish to cancel the election in the future you will need to repay the excess of VAT repaid to you over the VAT paid by you in the last three years or since the date of registration, whichever is the lesser.

      If you have any further queries please do not hesitate to contact our office on 021 4310266.

      Kind regards,

      Cathy

  119. Hello,

    I going to work in a school but contracted on a self-employed basis. I know that I have to fill TR1 form but I am not sure which parts I have to fill. I am getting confused with this form. Any help??
    Thanks,

    Maria

    • Hi Maria,

      Thank you for your query.

      If you would like to contact Sinead Herlihy of this office she will go through the relevant sections of the form for you to complete.
      Our office number is 021 4310266.

      Kind regards,

      Cathy

  120. I have been trading as a sole proprietor and have registered a company for the last 4 years and have been paying my PRSI. I am relocating out of Ireland and would like to know if I need to close my business and notify the tax authorities. However, when I return to Ireland I would still like to continue my business. Should I close it? If I leave it open do I still have to pay taxes even for the years I am not in Ireland?

    • Hi Yinka,

      Thank you for your query.

      If you will no longer be trading through your company then you should de-register it for taxes with the Revenue Commissioners. However if you want to keep the company then you will have to continue making the relevant filings with the Companies Registration Office. Once your company starts trading again you can then re-register it for taxes with the Revenue Commissioners. Finally you should also take tax advice in relation to your personal tax affairs so as to limit your Irish income tax exposure on any foreign employment income earned by you during your time out of Ireland.

      Please feel free to contact us on 021-4310266 if you wish to discuss this matter further.

      Kind regards,
      Cathy

  121. Hi there I was wondering if you could give me some advice. A company which has a number of shops in Portugal wants to sell some of my designs on cards which they want me to make and send them to sell. They have asked me to give them a vat number. I do not have a business or a vat number. I don’t think the amount of business will be huge , a few hundred euro maybe. I am a Irish resident and am a retired lecturer, so on a pension. I don’t know how to proceed, surely the tax and vat is up to me and they should only need to pay me? Please advise or point me in the right direction. also wondering if I ask someone who has a business to allow me to share their details? Many thanks in advance, best wishes Thelma

    • Hi Thelma,

      Thank you for your query.

      If your level of turnover from designing cards does not exceed the relevant VAT registration threshold then you are not required to register for VAT purposes. You should therefore inform your customer of this if you are not required to be registered for VAT.

      Please note that you cannot use another individual’s VAT number in relation to your sole trade sales.
      If you require further assistance please contact our office on 021 4310266.

      Kind regards,

      Cathy

  122. Hello

    Excellent blog. Some really useful comments on here, well done.

    Could you kindly help on a small inquiry I have in relation to VAT?

    Basically, I am already registered as self employed and live in Ireland. I am now going to start working (still self employed), but contractually with a company based in the UK only. I will be providing telephone sales services, working from home and invoicing the UK company monthly at an agreed rate.

    As the company is based in the UK – Can I just get clarification that I will not be required to register for VAT?. I will not be providing services to any other businesses. My only invoices will be monthly to the company in the UK. They will then pay an agreed amount to me in Euros each month.

    I may possibly exceed the €37.5k threshold in year 2, but just want clarity as the company has told me i do not need to register for VAT as I am in Ireland and they are based in the UK.

    Many Thanks

    • Hi Sean.

      Thank you for your query.

      If your turnover exceeds or is likely to exceed the relevant VAT registration threshold then you must register for VAT and charge VAT at the appropriate rate on any invoices raised by you. This is irrespective of the fact that you are Irish tax resident and your business customer is in the UK.

      If you require further assistance please contact our office on 021 4310266.

      Kind regards,
      Cathy

  123. Hi,

    I am sole trader, want to start with selling supplements online and in traditional way. As for online sales it is clear that i generate invoice for every transaction. How about retail in my spot, do i need a cash register? Or maybe I can use any other proof of purchase without cash register???

    Regards
    Peter

    • Hi Peter,

      In order to answer your query we would need further information from you.

      Please contact our office on 021 4310266.

      Kind regards,

      Cathy

  124. Hi Denis,
    Just a quick question, I am a massage therapist currently well under the VAT threshold, I have been offered a contract with a company and they require a vat number on the invoice, if I get a vat number am i then liable for vat on all income or only if I go over the thresold?
    Deirdre

    • Hi Deirdre,

      Thank you for your query.

      Once you register for VAT you are liable to charge VAT on all sales irrespective of whether you are under the VAT threshold.

      Kind regards,

      Cathy

  125. Hi there,
    I currently work full time and am hoping to set up a business on the side. In my current job I exceed my standard rate cut off point and some of my income is taxed at 41%. I also use all of my tax credits. Am I right to assume that any income I earn from my new business will be taxed at 41%. I am also wondering what PRSI class the self employed work will fall under and whether setting up a business will affect my PRSI class in my full time job or whether I would loose my entitlement to job seekers and maternity benefit etc when i set up this new business.

    Kind Regards,
    Mairead

    • Hi Mairead,

      Thank you for your query.

      Self employed individuals pay PRSI class S (4%) on their net profit. You are correct to assume that any income earned from your new business will be taxed at 41%, USC will also be charged on the income. Having self employed income will not affect the PRSI you pay in respect of your current PAYE position and therefore you should continue to qualify for jobseekers benefit and maternity benefit as you will continue to pay PRSI class A on your PAYE income.

      If you have any further queries please contact our office on 021 4310266.

      Kind regards,

      Cathy

  126. Hi Team,

    Thank you for such a great blog and offering your guidance to so many people.

    I wish to start an online business as a sole trader but do not wish to use my real name for privacy reasons . I do not want to have my real name associated with this activity. when my real name is googled for example I do not wish for my business to be found by potential employers or my customers know my real identity and look up for my personal information online. Again just for privacy reason and not of course because of any controversial or offensive nature of the business or because I have criminal records or things like that.

    I will operate a website under yet a different name from the pseudonym let’s say http://www.superbusiness.fr ( French customers) and use the the name Mary Pseudonym to establish my online presence and communicate with my customers ( I will be blogging and making videos)

    But considering all this I am wondering;

    1- Is it legal to operate a business under the name Mary Pseudonym ( not a slight variation of my real name or maiden name but a completely different name, a pen name if you will)

    2- Do I have to register Mary Pseudonym as a business name and also the domain name : “superbusiness” as a second business name? Basically I am wondering if it is possible to register 2 business names for the same activity.

    3- Is it possible to open a business bank account and paypal account under any of those business names and have no issue accessing the money when showing up under my real identity?

    4- Will my real name have to appear anywhere on my website or can I use Mary Pseudonym and “superbusiness” , even in the required information on the website ( e.g privacy policy, company address, etc)

    4- I will be selling virtual products ( mp3, ebooks, etc) Can I put the name Mary Pseudonym on those products and have access to the profits as Mary Realname?

    Thanking you so much for your insight,I have been reasearching for days and am desperate in finding clear answers to my questions

    Catherine

    • You can operate a business under a business name/s which I advise that you register. The bank account can use the business name only but check this with your bank. There are many websites without individuals names disclosed.
      You can access the profits that you make under a business name.

  127. Hello,
    i have a question regarding VAT. Iam going to buy food products in other EU coutry and sell in Ireland. As a sole trader who does not expect to go above the treshold of 35k /year. do i need to register for VAT to deal with bigger shops and food distributors???
    Are there any requirements that regaridng this? Do the big shops deal withs no VAT sole traders ??

  128. Hi , you have great website. I need your help. I am german citizen living in Ireland for 5 years. I am graphic designer, but not working. Since moved to Ireland I am housewife. For last few months I got some chance to work for someone as freelance. After that I was getting more offers to work as freelance online. I really love designing, and can’t live without that. I read on internet that I won’t need to register as sole trade because i am not receiving enough income. Now I am thinking to register as sole trader and work freelance online as part time only. And I think I won’t earn more than €500 per month for a year maybe.
    My question, should I register as sole trader or not, as i will be working only part time. And do i need to register from the date I worked for a project ?
    many thanks
    Momo

    • Hi Momo,

      Thank you for your query.

      As soon as you commence as a sole trader you need to register for taxes with the Revenue Commissioners. Also depending on your turnover you may need to register for VAT. If you require any assistance in registering with Revenue or filing your annual income tax returns please do not hesitate to contact our office on 021 4310266.

      Kind regards,

      Cathy

  129. hi how are you great info in the website but am a bit confuse i just started a classified website like buyandsell and donedeal but its free for everbody was wondering to register it for vat number but dont know what to do or where to start will be great for any information thank a lot
    joe

    • Hi Joe,

      Thank you for your query.

      If you are registering a sole trade/partnership for VAT Form TR1 needs to be completed and returned to Revenue. If you are registering a company From TR2 needs to be completed and returned to Revenue. Please see the link below to these forms.

      http://www.revenue.ie/en/tax/vat/forms/index.html

      If you have any further queries or require assistance completing the form, please do not hesitate to contact our office on 021 4310266.

      Kind regards,

      Cathy

  130. Hi, I would like to register as a sole trader. I understand I need to fill in a TR1. I want to sell kitchens. I’ve spoken to a company who can supply them at , eg , 3000 per kitchen and I can resell for 3400. I plan on doing 2 a month until things pick up. As I would be paying VAT to my supplier and considering my expected turnover would I need to register for VAT? Also I would only be supplying the kitchen but I could provide details for a fitter, separate from me, would this impact on me? Thanks

    • It appears that you would have to register for VAT if your annual turnover exceeds €75,000. The fitter is only a recommendation by you so it should have financial impact. Hope it goes well for you.

  131. Helllo,

    A very useful site. Thank you. But, I still need to ask a question. I work full time in a family business as a director with no shares. For a while I have been making wedding invites and cards for friends and relatives and I wish to go further and sell on ebay/donedeal, launch a website. I know I need to fill in TR1 and register a business name but how will this affect my current PRSI/USC which is at the lower rate. I dont expect to make 75K. Is this something I should speak to our accountant about?. Id prefer to keep it to myself. Thanks.

    • Thanks for your kind remarks — we try our best!

      Your current likely PRSI Class is A while the self employed Class is S so there will be no effect if you continue your employment. The upper threshold for USC is €16016 so no effect on your current USC if your salary exceeds that amount. Best of luck with your venture.

  132. Hi Seamus,

    My husband is sold trader for the last three years ( car repair services). He decide to cease the trade. We have some fixed assets are not disposed, do we have to pay VAT on self supply? And if you wish cancel VAT registration you have to pay back any exceed s paid by Revenue. Do he has to pay back any VAT exceeds to Revenue to cancel his VAT registration? As he claimed bigger amount of VAT then he paid.

    • Jelena

      Yes, VAT would need to be accounted for on the self supply.

      When your husband cancels his VAT registration number Revenue may request a repayment of the excess VAT reclaimed by him during the period of registration. Depending on the length of the period for which he was registered and other circumstances, the VAT inspector may reduce or waive any repayments due.

      Hope this helps you.

      Seamus Parfrey

  133. Hi Orla,

    I am currently employed, earning €40,000 p/a. I am thinking if setting up a freelance video and animation company on the side. Although I have some equipment at the moment, I will need to invest in newer more expensive equipment as I go along with money generated through the new company.

    My question is, if through buying equipment and running costs the new company does not turn a profit, (baring in mind that I will not be paying myself a wage for the first year or until I have sufficient equipment) where would I stand tax wise?

    Thank you very much in advance, great blog!

    Ronan

    • Ronan,
      Very simply if the company makes no taxable profit then there is no tax liability.
      Hope all goes well for you.
      Seamus

  134. Hi,

    Just a quick question regarding soul traders. I am registered in Ireland but have a contract in the UK for a months work. Is it still possible to use my Irish soul trader business, VAT number etc to invoice or do I have to set up an english company? BTW I am not in a position to set up a ltd as this would be the simplest work around ( send employee to eu member state with A1 tax certificate )

    Cheers,

    M

    • Marty,

      You can use your existing business and do not have to charge VAT if your customer is VAT registered in the U.K.

      Seamus

  135. Hello,

    just a quick question. I am setting up as a sole trader. I operate online only and profit funds go via payment processor to my bank account. Can i use one of my personal bank accounts for start (one i do not use, so no other transactions on the account).

    Thank you

  136. I am already a sole trader, trading under a CRO registered name in the services sector. I now want to expand into retail as a sole trader. I am already registered for VAT.

    Would you recommend applying for another trading name from the CRO? If I do, do I need a new VAT number (I will be paying a lot of VAT & charging it to end customers).

    Thank you for any advice.

    Neil

    • Neil,

      If it is a new business it is a good idea to register the business name.

      Your existing VAT number is fine but I suggest you let Revenue know what you are doing.

      Hope new business goes well for you.

      Any further questions please ask.

      Seamus

  137. I am an EU national and would like to set up a small photography business in Ireland (1 person – sole trader). At the moent I am building up my portfolio so I am not charging for the photo shots. Any revenues I will be receiving over the next few months will go towards the purchase of the equipment (lenses, backdrops etc, lighting etc). What are the first steps to do this? I want this to be 100% legal and comply with the tax requirements. Also I am currently entitled to Family Income Supplement (FIS) since I am unemployed, will setting up a new business (no income in the first year I assue) affect my FIS payments? Please advise. Many thanks. Regards, Lilly

    • Lilly,

      Register with Revenue as self-employed.

      Family Income Supplement (FIS) is a tax-free weekly payment for employees. Self employment alone does not qualify the household for FIS. Either you, your spouse, civil partner or cohabitant must be engaged in paid employment for the household to qualify for FIS.

      Seamus

  138. Hi

    Just reading through your blog and the Q&A’s, a lot of very useful information thanks.

    I am at a very early stage of setting up an online business and have a slightly unusual question:

    I am currently unemployed and, while I have registered a business name, I’m still investigating the options, doing in-depth market research etc – I’m still a good way off trading and possibility of any income etc.

    At the same time I will be incurring third party consultancy costs which will be subject to VAT.

    Is it possible to register for VAT only to reclaim this?

    Would registering for PAYE etc be deemed to be operating and therefore employed?

    Many thanks, Gerry

    • Gerry,

      It would be most unusual for Revenue to authorise a VAT registration without a concurrent income tax registration.

      Our advice would be to register for income tax and VAT, submit the VAT returns, and attempt to claim the VAT back. Revenue will most likely query why you do not have any sales.

      It should be noted that Revenue have stated that a person who is setting up a business but who has not yet commenced supplying taxable goods or services may register for VAT as soon as it is clear that he will become an accountable person. However they do not always follow precedent and your VAT reclaim may be refused if you are not making a taxable supply.

      If you decide that the trade is not viable you can simply deregister for income tax and VAT purposes with Revenue. In this instance if Revenue have refunded VAT to you they may request a repayment of same.

      You only register for PAYE if you have employees.

      Hope business goes well.

      Seamus

  139. Hey Seamus,
    First of all great blog. I am setting up as a sole trader
    as a family celebrant.Do I qualify for the tax relief scheme announced last October. I’m working contract and on low income family support and my wife is also not working for over a year. Do I need to inform revenue before I register or do i simply not file a return ?

    kind regards will

    • Will,

      The Start Your Own Business scheme provides for relief from Income Tax for long term unemployed individuals who start a new business. The scheme will provide an exemption from Income Tax up to a maximum of €40,000 per annum for a period of two years to individuals who set up a qualifying business having been unemployed for a period of at least 12 months (in receipt of jobseekers allowance, jobseekers benefit or a one parent family credit) prior to starting the business. It runs from 25 October 2013 to 31 December 2016.

      The relief does not require pre approval from Revenue. You are obliged to register for income tax purposes with Revenue and you claim the relief by completing the relevant section of your annual income tax return for each year.

      Hope you find this useful.

      Seamus

  140. hi seamus

    well first of well done on the blog and also for keeping up with comments fair play

    here is my situation i hope you can help
    i have been offered a contract but they need me to be sole trader and invoice them and such , i am unemployed for the last few years i have completed a fas training course,

    would i still be able to keep some of my benifits as it is a startup company and also would i also be tax free for a period of time

    thanks
    martin

  141. Hi Seamus,

    Great blog and info – hope you can help with a question.

    I am a full time employee paying PAYE. I have an idea to set up my own business so I registered a business name with CRO a while ago. However I have been delayed and have not started trading yet and might not start trading for quite a while.
    My Question: – do I still need to register as self-employed and file a tax return with the Revenue even though I am not actually trading so have no income from that business name? Can I wait until I am trading before registering as self-employed or is it something I should do straight away because I have registered the business name with CRO?

    Much appreciated,
    Brian

  142. If I have been submitting and paying VAT returns for periods in which I wasn’t obliged to file returns i.e. originally liable for VAT but subsequently fall under the threshold, is it possible to get this VAT refunded from Revenue?

  143. Hi I wish to start a business purchasing and selling used automobiles but I am starting small in my back yard. I read that to sell over five cars a year you must declare it as a business I doubt I’ll make much income starting do what should I do regards tax any help appreciated thanks

    Chris Byrne

    • Christopher,

      I would think that once you start trading with a view to making a profit you will be liable for tax.

      Where did see the information about 5 cars???

      Regards,

      Seamus

  144. I saw the information on a forum I can’t recall the website unfortunately so I should get my business license and register as sole trader for tax immediately?

  145. Hi,

    I have a question that is 98% similar with the question asked at post 98 regarding trading as a sole trader using two different registered names.
    I am trading as a sole trader using a business name “A”
    After I registered my second business name “B” I rang the revenue to add this trading name in their records.
    I was told that in order to add “B” name with them I will have to de-register “A” Name claiming that their system only has one field for trading names under sole trader.They suggested to open a limited company.
    My ‘A’ Business is still very small and I wouldn’t want to go for the limited company yet.
    Is it legal to operate using both trading names and to issue invoices with the “B” Name once is registered with CRO?
    Thanking you in advance.
    Fanel

  146. Hi, this is a fantastic forum!
    I am in the process of starting a stationery business. I have been buying supplies and equipment & paying for some services (photography etc) throughout 2014 with the intention of launching in Jan 2015. Can I use these start up costs as expenses for my 2015 tax submission even though they were not purchased in 2015 and prior to registering as a sole trader (I will be doing that this in December). They are solely for the use of the business.
    Many thanks

    • Michelle,

      Section 82 TCA 1997 provides for certain pre-trading expenses of a trade or profession being allowed in calculating the trading income of that trade or profession once it has commenced provided they are incurred in the three years prior to commencement.

      These expenses generally relate to setting up the business such as accountancy fees and such like. You should have no problem with resale purchases and advertising costs.

      Regards,

      Seamus

  147. Hi Seamus,

    Great blog post & it’s fantastic that you are still responding to comments!

    I’ve recently decided to go out on my own as a freelancer and I am setup as a sole trader. I plan to start trading this week and have a few queries regarding invoicing:

    – I’m setup for VAT, unsure why, maybe I filled ticked out a box on the TR1 form but should I be concerned or is it good to be setup in the long run.

    – Do I now need to show “+VAT” on all my quotes and invoices?

    – Is there anything I need to do differently under for a UK client with the introduction of VAT MOSS in the EU. Or am I getting a bit ahead myself even?

    • Ray,

      Show all quotes as excluding VAT and state that.

      Sales invoices must show VAT.

      VAT MOSS may not apply to your industry and you probably may be getting ahead of yourself!!

      Regards,

      Seamus

  148. Dear respected Seamus

    Im starting my own business. I will be importing some clothes from China, estimated value of 1000Euro per month.

    My question is whether I need to register a company ( VAT) or should I continue as a Sole Trader?

    If Im a sole trader then , do I have to pay more tax at the Irish Customs? compared to VAT registered ltd?

    Thanks in advance

    Eagan

  149. Dear Seamus,

    I have some questions in regards to starting up a business in Ireland. It is a clothing business which will import from Asia.
    1) Should I be concerned about using PPSN for registration?
    2) How many employees can I have if I become a sole trader? So far I imagine I can work with another person and that would be enough for us, especially from the time being?
    3) I’m still a little confused about VAT? How would it work? Should I register for VAT?
    4) As a sole trader will there problems getting my items at customs in ireland?

    Thank you
    Appreciate it.!

    • Suli,

      1 No

      2 As many as you want

      3 You must register for VAT if your annual turnover exceeds €75000

      4 There should be none or no more than usual!

      Regards,

      Seamus

  150. Is it mandatory for a company to have an accountant? Can a company employee do their bookkeeping process themselves?

    How many times per year bookkeeping process required for a company ( turnover of €20.000-€30.000)

    Can a company claim back VAT % that was paid at customs, or some of it , if not 100%?

    Thanks Seamus

  151. Hi,

    Can I have two company names but use the same vat number, I have a security company but am getting into the I.T. sector but want to have a new name for that.

    Regards
    Ruaidhri

    • Ruaidhri,

      If you have 2 companies you must have 2 different tax numbers.

      However a company can use 2 different business names (e.g. ABC Security and ABC IT) and just use the same tax number.

      Anything else you need?

      Regards,

      Seamus

      Regards,

      Seamus

      • Thanks for the reply Seamus, so if I have a security company called securco my it company will also have to be called securco but I can put IT services at the end.

  152. Dear Seamus

    I am filling out the TR1 as I am becoming a sole trade very soon.

    I doubt in some questions and I would ask you please to help me with these concerns:

    1. One of the point of the form is the number “18 .State Registration number of entity prior to Administration/Liquidation/Receivership of company/Individual on whose behalf you act – where can I get this number?

    2. I am planning to do trading under a business name but I have not registered it yet but the form TR1 is asking “19. If trading under a business name, state Trading as……” Do I need to be registered before to fill out the form TR1.

    3. I need to give answer to the question, ” 26. To what date will annual accounts be made up” -What do I need to put here?

    4. My business is basically is to buy shoes in Spain and resell them to the small retailers here in Ireland. I would only purchase shoes from my supplier if I get customer orders. I would keep the shipment in my house until delivery is done. I tell you this because in one of the question in the TR1 ask for ” 29. If you rent your business premises state- Name and private address of the landlord – Do I need to put my personal address here where the good are hold until I deliver them?

    Thank you very much

    Didac

    • Didac,

      1. Ignore as this very probably does not apply to you?

      2. You can register the name afterwards.

      3. Why not use Dec 31 2015 if you are starting now?

      4. You can put down your personal address.

      Hope the business goes well for you.

      Regards,

      Seamus

  153. I am considering setting up as a sole trader in the near future, can I purchase computer equipment prior to setting up business and registering as sole trader and include the cost for depreciation purposes within the business accounts?

      • Thank you very much Seamus, I wasn’t sure as someone told me recently that you could only right off equipment against the business if it was bought after the business was registered.

        Sorry Seamus I should have asked you this in the first question.

        1. Do you know what is the time limit prior to the business being established within which purchased equipment can be included?

        2. Could I include camera equipment I bought 2 years ago? Camera equipment is integral to my business as a video maker.

        Kind regards
        Johnnie

  154. Hi Seamus,

    Just a few questions I was wondering about. Am currently operating as a sole trader, having established myself from 02/01/2015 as part of the Back-To-Work Enterprise Allowance Scheme. Am I right to assume that my first Tax Return as self employed will need to be completed by October 31st 2015(for tax year 1/12014-31/12/2014)and-as I was unemployed for the 12 months previous-this would merely consist of reference to amounts paid by the DSP for that calendar year? Is such a return easy to complete?

    Secondly, as I will be opening a business bank account for my enterprise(teaching classes) and operating the business mostly at home, is it proper that domestic costs of light and heat that are currently paid by direct debit from my personal bank account can be transferred to costs subtracted from the Business account; if so, is such an overhead a deductible for the current and subsequent trading years?

    Many thanks for your continued answering of all our questions.

    Regards,

    Stephen

    • Stephen,

      As you started in 2015 your tax return for 2015 must be filed by Oct 2016.

      Tax returns are not easy to complete otherwise i would not have anything to do !!

      You can claim a reasonable portion of home light and heat from Jan 2015.

      Regards,

      Seamus

  155. Hi Seamus,

    I am looking to set up as a sole trader, I currently own a tow truck and the company that wants me do work for needs me to be a registered business.

    How do i set up as a business? what steps are needed to be taken ?

    I will be the only person working and operating the business so just need to make sure i’m able to pay the relevant taxes and set up my business.

    Best Regards
    Stefan Molloy

    • Stefan,

      Hopefully the advice i gave you over the phone re TR1 and Business Name registration was helpful.

      Regards,

      Seamus

  156. Hi,

    I want to register as a sole trader. I will do a very small crafts business and I will sell my items on internet. I plan to work for my business from my home (I am a tenant, I’m renting this house).

    My single obligation is to request the permission of my landlord and after that I can fill the TR1 form and get the business started?

    Or I should also refer to the Local Authority to obtain Planning Permission?
    I need neighbors permission?
    Sorry I don’t really know if this question is in your area.

    Thank you very much,

    Elena

    • Elena,

      The vast majority of people who run a small business from home do not apply for planning permission.

      I wonder do they need it (that’s outside my area of expertise)?

      Regards,

      Seamus

  157. Hi Im self employed as a childminder since aug 2014, i will apply for the 15k tax exemption, Prsi is 500, is there still a figure below which you dont pay any Prsi?

    im now researching opening up a small photography business aswell, do I have to double pay the Prsi payment or is the one enough? Ill plan having small studio from home, are rates payable?Any other advice welcome! Thanks in advance.

    • Lina,

      For the tax year 2014, the exemption threshold for PRSI is €5,000. An individual whose only income is sole trade income(s) makes one PRSI payment and this is calculated based on their total income in the relevant tax year.

      Not sure about rates for home studio but unlikely.

      Regards,

      Seamus

  158. Hi I am thinking of starting my own business but am employed elsewhere and don’t want to leave that job. Is that possible and if so want way should I go about it?

    Thanks
    Stef

    • Stef,

      Yes it is.

      File a TR1 form with Revenue and register a business name with CRO if you are not trading under your own name.

      Best of luck

      Seamus

  159. Hello Seamus. Have been following this blog for a while now. It’s invaluable.

    I’ll soon be setting up as a sole trader and want to employ my husband. He will work full time in the business so won’t have any other income. We are presently taxed as a couple. As neither of us will now be eligible for PAYE credits should we carry on being taxed as a couple, is that still the best option regarding reducing our tax liability?

    Also regarding my own private drawings as a sole trader. I’m not clear how these are taxed.

    Finally am I liable for Class PRSI on all the profits of the business?

    Thank you very much.

    • Angela,

      Yes from a tax perspective the better option is to remain jointly assessed.

      Net profit is taxed and not drawings.

      You pay PRSI based on your tax adjusted income i.e. net profit after tax adjustments.

      Regards,

      Seamus

  160. Hi
    I was wondering if you could help and advice me, I just moved from UK to Ireland and want to start my own business as sole trader, I don’t know nothing about tax system and registering as business here in Ireland. How long I need to be here to apply for PPSN and I will need to employ a few people so do I need to have an accountant? and do I have to have bank account? is it need to be a personal or business bank account?

    Hope to hear from you soon.

    Many thanks for your advice in advance.

    • Fahim,

      You can apply for PPSN immediately.

      To register a business in Ireland register your business name with the Companies Registration Office and also register with the Revenue Commissioners using Form TR1.

      I would recommend getting an accountant immediately especially as you will be employing staff.

      Open a separate business bank account.

      Hope all goes great for you.

      Regards,

      Seamus

  161. Hi Seamus,

    Im employed full time and I’m also registered as a freelancer. I am in the process of taking one of my services and providing it as an online business. The online business will be run by just myself and It wont pass the VAT threshold on the first year. It will also be under a business name rather than my freelance name as its focusing more on one service that I see a gap in the market for.

    Could you provide some information on the correct way to set up the legal end of this?
    Or is it possible to combine it with my freelancing activity even with its different name etc.

    Great site btw!

    Thanks in advance,
    Shane

    • Shane,

      As you are using a business name you need to register it with the CRO.

      You are already registered with Revenue so all ok there.

      Keep it separate from your other business activity accounting wise.

      Regards,

      Seamus

  162. Dear Denis,

    I have a brother working as a marine harvester (fisherman) for the past year. He hasn’t registered as a self employed person as of yet as he has been fishing around Europe for 9 week and home for 2. Should he registered with the CRO and tax authorities immediately in order to process his tax liability for 31 October 2015?

    Could he be liable for any penalties for registering a year after self employment?

    Regards

    Mary

  163. Hi there,

    Thanks for the info.

    I have been travelling for quite some time and beginning work as a freelance writer. Unfortunately I am not in Ireland to register in person but need to register as a “sole trader”.

    I was last working in Ireland 2013 and wondering if you could let me know if I have options in terms of setting up a business name – I need this to open a bank account to receive payments from clients.

    Currently in Canada, travelling to Asia next and intend on travelling for 12 months more after that – I am a travel writer.

    Thanks
    Derek

    • Derek,

      It’s normally difficult to register as a sole trader if you are not in Ireland but as you are a travel writer and presumably doing research abroad you should be OK.

      To set up a business name you must complete form RBNI A which you can do online.

      Hope travels and writing go well and stay safe.

      Seamus

      • Thanks Seamus,

        You are providing a very noble service here, thank you for doing so.

        My income (solely online) will be less than 10k a year. Can you let me know if I need anything else?

        Essentially just want to operate under a Business name and set up an bank account to give myself more credibility to potential clients.

        Many thanks

        Derek

  164. Good morning, I am doing my best to find an answer for the following but as I am new in Ireland, I am lost. I am an EU citizen and providing online customer care support for an American firm based in the US. I am planning to continue doing it for 1 more month (hopefully I can find a full time job in Ireland and then I would do this online job only part time. As this is only a side job in a year I would not earn more than 5000-10000 EUR. For that very little amount do I need to be a sole trader? Income would seem like 1000 EUR for one month and 300-400 for the rest of the year. How much does it cost to open/close a sole trading business? Thank you so much for your help and answer!

  165. Hi Seamus,

    I’ve recently started my own company / hobby which I don’t forsee making any significant profit from, approx 5,000 euro p.a. Recently I was asked for an invoice, however I have yet to register this as it started as a non profit hobby. Do I now need to register as a sole trader in order to issue an invoice, there will be no vat involved given that the profit will be very minimal.

    Thanks.

    • Anthony,

      If you are earning any income that is not taxed at source you are obliged to register for income tax and make annual income tax returns to the Revenue Commissioners.

      Please note there is no minimum threshold involved; once you are in receipt of any income that is not taxed before it reaches your hands, you must register for income tax.

      Seamus

    • Anthony,

      If you are earning any income that is not taxed at source you are obliged to register for income tax and make annual income tax returns to the Revenue Commissioners.

      Please note there is no minimum threshold involved; once you are in receipt of any income that is not taxed before it reaches your hands, you must register for income tax.

      Seamus

  166. HI Seamus,

    I have been reading through the responses and trying to work out what’s relevant for me but I hoped you might help me with some specific questions, if you can!

    I’m setting up as a Marketing Consultant and will register myself as a sole trader. My first large client is a Swiss startup (based in Switzerland so I will be working from home). They have only contracted me for a month so far until they see how their funding goes in January. We are in the process of agreeing the fee so I will need to get myself registered as a Sole Trader and was wondering what happens if they don’t get funding. I should register on revenue.ie too for the payment but if it doesn’t take off, I was unsure of where I stand after that and tax-wise what I would need to do.

    Thank you for any help – it really is a fantastic service you offer here!

    • I suggest you wait until their funding position has been clarified and if they are successful you can register with Revenue then.

      Seamus

  167. hi seamus,
    I,m currently a paye worker and I,m about to set up a ltd company dealing in the automotive business,
    I,ve registered a business name with core.ie but have not registered the business with revenue yet.
    i won,t start trading until about march next year so i was holding off on registering until next January,
    my problem is i,m looking to trade my van in for a new one for 2016 ,can i do the deal and transfer the
    van to the new business in the new year ? or is it better to register first and then purchase the van ?
    i won,t be registering for vat so won,t be claiming that back ,but can i claim 12% per year for five years in tax back
    on purchases/expendure ?
    regards michael

    • Michael,

      It may be best to wait and purchase the van directly through the company when it is formed.

      A 12.5% wear and tear tax allowance is available over 8 years on the cost of any van that the company will own.

      Seamus

  168. I am working for an IT company and want to invoice to the same company for some additional work. How can I do that? Is it necessary to be registered as a Sole trader?

    • Manoj,

      Very unusual to invoice them if you are an employee already!

      But if this is ok from a tax angle just register as a sole trader to keep Revenue happy.

      Seamus

  169. Hi Seamus
    I am working fulltime with a company but have recently qualified as a massage therapist (completely seperate to my existing work) and am hoping to do some work in the evenings/on weekends. What do I need to do with regards registering for tax/registering company name & will it affect my existing employment tax set up etc?

    • John,

      Register with Revenue using TR1 form and with CRO if you want to register a business name.

      It should not affect your PAYE position.

      Seamus

  170. Hi, I was working as a paye employer for a very small business for four years when I offered in 2014 to go self employed to save them money. In the spring 2015 they gave a vague answer that their accountant would de-register them for paye (I was the only employee). I never received a p45 and my wages just continued on the same as always. Mid Dec 2015 I was let go and told I should have registered as self employed from the beginning of 2015. I said I didn’t realise I had gone self employed as I hadn’t received a p45 for y/e 2014 (still haven’t), and was told by the employer that I didn’t need one Will I be facing big fines for registering now as self employed for the whole year of 2015?

  171. Hi Seamus, i was wondering if you could help me with some advice; i started my retail business over 1 year ago as sole trader and , knowing that i can do drawings instead of wages, i want to go on payroll. Is that possible? Thanks , Michaela

  172. HI CAN YOU HELP ME,I WILL BE STARTING WITH A CERTAIN COURIER COMPANY NEXT WEEK ON A SELFEMPLIYED BASIS.I WILL BE PAID A CERTAIN AMOUNT OF COMMISSION PLUS VAT,BUT THEY WON’T BE ABLE TO PAY ME THE VAT UNLESS I HAVE A VAT NUMBER,WHICH I DON’T HAVE,CAN I USE THE TR1 FORM JUST TO REGISTER FOR A VAT NUMBER OR DO I HAVE TO REGISTER FOR TAX AS WELL.ALSO WHAT ANSWER DO I GIVE TO Q35 (C).THANKS PAT.

  173. Hi
    I am a student that’s currently selling electronic devices on eBay which I manufacture by hand in my spare time.
    I only make about 300 Euro profit a month, but I anticipate that my little business will grow over time.

    I know that profits even from eBay sales should be reported for tax and I don’t want to run into any trouble with the revenue.
    Because of this a have a small question: What should I do to run this small business legally?
    Is there a threshold below which I am exempt from taxes, because its such a small business?
    Should I register as a Sole Trader?

    Maybe there is something else that I can do and would be more beneficial for me.

    Thanks so much

    Best Regards
    Lukasz

  174. just wondering if i use social media to promote and sell products and gain a profit and commission on team sales do i have to register as self employed the earnings would be only considered casual as not alot to be made straight away with the company

  175. Hi Seamus,

    Your website Accountants Cork – Parfrey Murphy Chartered Accountants is so full of information. Thank you.

    I have a question though: am I authorized to run 2 different businesses as a self-employed under 2 different business names in Ireland? I’d like to first start a business as a translator and later in the year I would probably start a smaller business as a retailer of little charms, pencils, notebooks, etc. all this from home.

    I plan to open 2 separate business bank accounts, register 2 different business names. Can I register 2 separate self-assessments@ Revenue, etc… Is that possible?

    Many thanks in advance for your help. Kind regards,

    Isabel

    • Isabel,

      You can of course run 2 different businesses with 2 different business names but you will only have one income tax return.

      Regards,

      Seamus

  176. Hi, I’m setting up a residential sports summer camp, to set at a rented boarding school in Ireland. I plan to have between 6 and 10 employees working for me for about 10weeks a year. Is there a reason why I should I register as a Limited Company, or is it sole trader, I should be registering as?

  177. Hi Seamus,

    Fantastic blog you have here. It might be a good idea to bundle similar questions and replies together as I am sure this question I am about to ask will have been dealt with previously.

    Myself and a potential business partner are looking to set up a partnership. We are in the process of registering with the CRO but are in a bit of a pickle regarding registration address.

    We are both Irish based full time PAYE workers. Our address options include rental address(against contract so this is ruled out), long term partners address, family 1 address, family 2 address. Our main concern is the transfer of any financial implications on these addresses should out company fail or become profitable. i.e. will debt incurred be transferable on to these addresses or if the company is profitable will profit be associated with the address come sale time.

    Thanks in advance for your help,

    Annie

      • Correction to note above. We will by operating as a partnership.

        Is there a CGT implication on my partner(relationship) as sole owner of the property that the business will operate from.

        • Annie,

          There should be no CGT issues as long as you are not cliaming tax relief on the property which is unusual.

          Seamus

  178. Hi,

    I have read most of the posts on this blog. It is a fantastic resource and you are to be congratulated on it. My question is twofold, (a) I have completed a small amount of consultancy work in 2016, just in In October. I have invoiced the customer but have not yet received a payment, I asked them to hold off until I set up a dedicated business account. I am and will remain a PAYE worker but will do this work on the side. I have not yet registered as a sole trader but intend to do so in January or February. Would I be better off to register using the TR1, and re invoice them once this is complete, cancelling the original invoice so that my business, in effect commences in 2017?

    (b) the amount is small – €250.00 and I am concerned that I would be liable to pay Class S PRSI minimum contribution or other payments on the fee and I would then effectively have done the work for nothing.

    Thanks in advance for your help.

  179. Hi there,

    I have a quick query in relation to registration where the sole trader was previously registered for VAT and now wishes to re-register for VAT – does he need to fill out a TR1, he is now registered for Income Tax, but is reading “Ceased” for VAT as he de-registered in 2007 – how can we re-register this tax?

    Thank you,

    Katie Lacey.

    • Katie,

      In order to re-register for VAT you will need to complete a paper copy of a TR1 and submit this to the Revenue Commissioners.

      Seamus

      • Seamus,

        Thank you for your help. I have one other query, how does the sole trader invoice sales when awaiting registration as Revenue are estimating the registration to take 20 working days, seems unreasonable that he would have to continue to spend what he is not earning, physically per se, by not being able to collect monies for work done.

        Thank you,

        Katie.

        • Katie,

          If you are not getting VAT registration just send your invoice.

          If awaiting VAT registration and no problems anticipated perhaps send a pro-forma invoice (as solicitors do!!) and note on the invoice that a VAT invoice will be issued when payment has been received.

          Hope this helps.

          Seamus

  180. Hello, I’m going to open childminder service and I’m going to use my living room for that. It will be small business only 2 kids. I know I need to register for tax, but I’m still confused with that if I’m renting house I need to put somewhere landlord details or only my? I’m confused with that question 30 and 40. And do I need to register for VAT, because it will till 15 000 only or less. Thank you

      • Thank you very much for your answer. I have one question. I already registered on revenue fill up that form TRI and what next? Do I need wait for some paper from revenue? And how long going to take? Thank you.

  181. Hello I would like ask you. I’m going to be a childminder at home.im renting house I’m little bit confused ‘do I need to fill question number 40? I’m going to have just 2-3 kids. I don’t need register for VAT. Thank you. Is working together revenue with social or?

  182. I am registered as a sole trader I am working as a psychotherapist from home. I also room rent to other therapists and was wondering if inneed to ask them if they are registered as sole traders first or does this not concern me once I am registered and paying all my own taxes and vat I am registered under another company name hense me wanting to know as I want to protect the name of the company. I know some therpists who don’t want to register for whatever reason and I won’t room rent as I am afraid and audit may bring that back on me ? Could it or once I’m doing things by the book am I myself covered?

    • Catherine,

      I would suggest, to ensure that there is no misunderstanding at any time, you issue room rental invoices/receipts to your colleagues and also have them confirm in writing that they are self-employed and have no business relationship with you other than as landlord/tenant.

      Hope this helps.

      Seamus

  183. Hi Seamus,

    I have a question about the TR1 form. I am a therpaist renting a room. There is another therpaist who has leased the whole building and I give the other therapist a percentage of what I earn (for me rent).. Q.30 is looking for the landlord details, do i put down the landlords details even though I have no dealings with him? Thank you

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