Tax on Second Income

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ccbkd

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As a full time PAYE earner, I also have undertaken to start my own work at evenings and weekends for a new client base I have built up, I am aware that if I earn under 35,000 I do not have to register for VAT, however recently someone advised that also you donot have to pay Tax on amounts under 18,000 for the tax year, I am not sure how true this is, I thought you were liable for all earnings at your marginal rate, Would appreciate clarification
 
Hi,

by "tax under 18k" i presume you mean income tax? this should all be disclosed to revenue less any relevant expenses and then taxed at whichever rate it brings your income up to including your PAYE income
 
Thanks, so if for argument sake my PAYE salary is 80,000, and I earn 17,500 for separate weekend work, my Tax Liability is on 97,500?
 
And finally, Some of this extra work involved driving to and from sites, is it suffcient to charge distance travelled at 79 cent a mile and forward to revenue and offset against tax. or is there some other burden of proof required, I can't see how it could be otherwise policed but on good faith.
 
You may be digging a hole for yourself with 79 cent / mile.

All business mileage rates must be agreed with the Revenue in advance of payment; you cannot simply pick an arbitrary mileage rate and offset it against tax.

You may be able to offset the cost of motoring incurred discharging the duties of your part-time venture against tax. You will need to keep detailed records (total motoring mileage and costs = personal + work-related) and present them to your accountant at tax-year end.

AFAIK there is no simple formula to apply here as "it depends".
 
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Yep the above are correct, I won't worry about the motor expenses!

It will effect your PRSI though.
 
ccbkd said:
Thanks, so if for argument sake my PAYE salary is 80,000, and I earn 17,500 for separate weekend work, my Tax Liability is on 97,500?
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In your example above, your employer deducts PRSI and levies on the 80,000 at the appropriate rate through your payroll system weekly / monthly.

When you submit your tax return at year end for the 17,500, the Revenue will issue you with a tax bill and MAY retrospectively look for PRSI and levies on your additional income, up to about 5%.
 
mathepac said:
In your example above, your employer deducts PRSI and levies on the 80,000 at the appropriate rate through your payroll system weekly / monthly.

When you submit your tax return at year end for the 17,500, the Revenue will issue you with a tax bill and MAY retrospectively look for PRSI and levies on your additional income, up to about 5%.
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Yes, also by accounts filing returns online it automatically asseses the balance of PRSI due for the extra income
 
In addition, due to your additional income, you will be liable for PRSI on any interest that you earn from savings accounts etc. including SSIA maturity interest payments. PRSI will be deducted at 5% (but I think there is a deduction to 2% for the first year or two of operation) and it will be deducted even though you will have met the PRSI ceiling in your primary employment.

I am in a similar situation and the PRSI on the interest payments is an annoyance as you have to determine interest payments from all accounts (including the 5c you get in a year from your current account ;))
 
mathepac said:
You may be digging a hole for yourself with 79 cent / mile.
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Are there not standard rates for mileage as agreed and used by civil service, I thought it was nearer 126 cent/mile?? Is it no reasonable/allowable to use that rate??
 
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