Freelance + tax?

D

doodler

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I intend to work from home on some freelance work, while keeping my fulltime job, and need to make sure that i am paying all the correct taxes, etc. should i register for vat? (there are 2 of us thinking of trading under a business name). can i pay the tax seperately, so that my employer is not aware of it?

any help would be appreciated.

thanks
 
doodler said:
I intend to work from home on some freelance work, while keeping my fulltime job, and need to make sure that i am paying all the correct taxes, etc. should i register for vat? (there are 2 of us thinking of trading under a business name). can i pay the tax seperately, so that my employer is not aware of it?

any help would be appreciated.

thanks
Click to expand...

Hi Doodler,

The only tax that you will have to pay is income tax. You are not obliged to register for Vat unless your turnover will be over €37,500. Your employer need not know anything about your part time work and you can complete a Form 11 (Income Tax Return) at the end of each year but if it is a partnership then you need to complete a Form 1 Firms and the both of you complete a Form 11 seperately. Best of luck.
 
That's very useful advice Jockey thanks for posting it! Can i ask a couple of questions to clarify please?
1. Is the 37,500 including the wage from the full time job?
2. Ive had employers say "id prefer to work with someone if they are registered for VAT", why might this be. Is it a misconception - not reg. for VAT = not paying tax? or is there another reason?
3. Do you have to set up a company or register with anyone? Assuming the income will be low to start off less than 10k-20k.
3. When you are invoicing assuming no VAT can you invoice as a named entity eg 'mywork.com' or do you have to just put down your personal name? the reason i ask this is because i would prefer to brand my invoices and work at trying and build up a brand. Even if its before regestering a company.
 
Hi Orbi,

The 35,500 is seperate to your wage it is the turnover of your business.
the reason people prefer to work for people who are registered for VAT is because they think is saves them money because the reclaim back the VAT that you charge! But also because if you are registred for VAT is gives a sense of security and that you are here to stay.
You do not have to set up a company but you do have to register a business name with Companies Registration Office and also register for tax. Depending on what you are doing it might be worth setting up a company for limited liability but we warned this might not be tax efficient and also has extra costs involved.
When you are invoicing you can use your named identity as long as it is registred with CRO.

Best of luck
 
1. No
2. Ask them, as not having to pay VAT on an invoice is a plus for their short-term cash-flow
3. Once your non-PAYE income exceeds around €3k per annum, you need to register as self-assessed for tax-purposes with the Revenue
4. (but your 2nd 3. ;) )The normal thing is to quote your PPSN and your name & address on the invoice. If you wish to register a business-name, you must do that via the CRO - http://www.cro.ie/

I think you need to seek professional advice before going any further.
 
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Cripes! That's fantastic advice guys very kind, i wasn't expecting that level at that speed, very much appreciated. Ill look into the CRO site and see if i can find any more info to suit my particular case.

Mathepak - what is the case for under 3k & Sorry about the 2 x 3's I lost the run of myself!! :)
 
orbi said:
... Mathepak - what is the case for under 3k ...
Click to expand...
If income not subject to PAYE exceeds €3,174 (bank interest, rents, share dividends, your invoices, etc) in a tax-year then submit Form 11 for tax-returns and remit additional tax, levies & PRSI otherwise, as PAYE tax-payer submit Form 12. This is a very simplistic explanation.
 
Beware that you keep enough money aside to pay the income tax and PRSI on this source of income. Work out what your marginal rate of income tax is and multiply this by your earnings and lodge to a seperate bank account/credit union account.
 
Mathepac
where could I get such an info about this below? I cannot find it. On revenue is only stated that have to register as self-assessed when you earn non-PAYE income and nothing about 3K.

3. Once your non-PAYE income exceeds around €3k per annum, you need to register as self-assessed for tax-purposes with the Revenue
 
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