diy accounting - it contractor - limited co

[witold]

Hi,

I got an IT contract with a bank that should run for the next 12 months at least.
I've set up a new limited company for this purpose.
I'm the only director, my wife is the secretary.

How hard would it be for me to do my own taxes?
CT, VAT ( I would be over the limit ), PAYE.
Am I insane to even consider this?

I'm happy to learn how to use software like BrightPay to handle PAYE/PRSI/USC, and figure out how to do VAT returns and CT.

I could pay for an accountant, but I do value independence and it's an opportunity to learn something new.

My current mental model is: 'I wouldn't call an electrician to replace a socket in my house because it's a relatively simple job once you know what to do & aren't doing stupid things.'
Since I will have a very simple setup: single PAYE and one client with the same daily rate, is it rational to attempt to go DIY?

I know I can shoot myself in the foot here, but I thought I'll ask for an opinion.
Did anyone here did their own taxes without accountant and 'lived to tell the tale'?

 

[Brendan Burgess]

If you want to treat it as a learning experience, by all means, do it.

But I would recommend paying an accountant to review it.

There are a few potholes and they could be quite expensive.

And if you do most of it yourself, an accountant would be a lot cheaper anyway.

Don't forget you will have to make returns to the Companies Office as well.

 

[Persia]

Presume the cost of an accountant can be written off against tax therefore making it a relatively easy decision. Plus their advice/knowledge may well save you money.

 

[Robovac rider]

Learning how to do PAYE and USC is very simple,
You will be acting as an employer.
The process of how this operates is clearly explained on Revenue.ie. With just 2 employees you would not need software.
You can use the online form method. Revenue will send you instructions for the PAYE and USC deductions. This is called an RPN. (Revenue Payment Notice)
You can get details of PRSI rates and classes to be applied relating to the wages amounts from DSP.
You will pay employers PRSI directly to Revenue and deduct employee PRSI from the wages.

Revenue will bill you once per month for the total amount of PRSI USC MFF and employers + employees PRSI due for both employees. You can set up a Direct Debit Instruction and Revenue will automatically take payments near the end of the next month. So very easy to operate.

A few minutes with a calculator would determine how much PAYE USC and PRSI to deduct for each payment period.
You can also use the online form to deduct My Future Fund payments and other types of pension deductions such as PRSA payments.

 

[lukegriffen]

It's easy to do vat returns every 2 months & paye returns on a monthly basis, but I think you should get an accountant for end of year accounts, ct1 , filing b1 etc. Or at the very least review what you've done. If you ever get queries from Revenue that you don't fully understand (or worse - an audit!), it's nice to know you've someone you can ask about it. You can do your own personal form 11 yourself.

 

[witold]

Brilliant, thank you for all the responses.

Don't forget you will have to make returns to the Companies Office as well.

Thank you! I wasn't aware of this.
That's the B1 form made to CRO?
First one 6 months after incorporation and then every 12 months ( with financial stmts ).
I definitely don't want to miss this one.

You will pay employers PRSI directly to Revenue ...

If I'm a solo director with 100% ownership, do I need to pay employers PRSI on my own salary?
I read somewhere I might fall under 'class S' and be exempt?

You can use the online form method. Revenue will send you instructions for the PAYE and USC deductions. This is called an RPN. (Revenue Payment Notice)

Thanks! I didn't know I could pull RPN values 'manually'.
I was employed this year and I'm mid year PAYE.
I was thinking to use free trial of BrightPay to verify my own calculations ( would be good to know how to do them manually ).

It's easy to do vat returns every 2 months & paye returns on a monthly basis, but I think you should get an accountant for end of year accounts, ct1 , filing b1 etc. Or at the very least review what you've done.

I will discuss with an accountant my approach and have them verify B1 and CT1 and year end financial statements just to be safe.
I'm also thinking to put my partner on a salary, but this might be tricky and I don't want Revenue going after me.
I'll have to discuss this with an accountant.


Does it make sense to change financial year end to 31st of December 2026 to simplify things?

 

[Robovac rider]

If I'm a solo director with 100% ownership, do I need to pay employers PRSI on my own salary?
I read somewhere I might fall under 'class S' and be exempt?

'Certain' company directors are class S.
Contact DSP to check if this includes you.

 

[_OkGo_]

My current mental model is: 'I wouldn't call an electrician to replace a socket in my house because it's a relatively simple job once you know what to do & aren't doing stupid things.'
Since I will have a very simple setup: single PAYE and one client with the same daily rate, is it rational to attempt to go DIY?

The reason it is easy to replace a socket is because 98% of the work has been done. You are just switching a few connections and then following the existing wiring i.e. you have a template.

What you propose for your accounting is to start and learn from scratch with no experience. It would be much easier for you to pay an accountant to do it all for you this year. Then you can assess how easy or difficult it is for you to replicate next year. Or even easier, increase your billing rate to cover your accounting fees.

I will discuss with an accountant my approach and have them verify B1 and CT1 and year end financial statements just to be safe.

I don't think there will be much discussion. You either pay them and they take professional responsibility for completing or not. I don't think there would be many accountants that would be interesting in mentoring you through the process.

 

[Firefly]

How hard would it be for me to do my own taxes?

As a longtime IT contractor, I would highly recommend an accountant...one mistake could cost you dearly. Also, if you are ever audited by Revenue, the fact that an accountant did all your returns is bound to look better. The cost is tax-deductle too.

 

[Savvy]

Does it make sense to change financial year end to 31st of December 2026 to simplify things?

Personally considered this in the past as mine is end Feb but to be honest it makes no difference

How hard would it be for me to do my own taxes?

Contracting over 15 years and I wouldn't even consider doing any of this. Focus on what you are good at and get an accountant to focus for you on what they are good at.