Making VAT/PAYE returns on a ltd company

[Fluffy2006]

Hi everyone
I just have a couple of questions about setting up a limited company before I go talk to an accountant.

I'm a PAYE IT worker considering setting up a limited company to do some contract work.
First of all (although I'd prefer to stay a sole trader) the company where I have a really good offer from is pushing for a company to be set up.
I've googled and come up that I'll need to complete Form STR and TR2 for revenue and can buy an off the shelf company from companies office.

Is the TR2 all I need to register me for VAT and PAYE? I will be the only employee of the company

I'll be a director and an employee but when I pay PAYE on whatever salary I pay myself will I pay PRSI at the A or S class?

If I work from home - maybe 10% of my total working hours - can I claim a % of ESB/Heating as an expense of the business?
And is this something that needs to be agreed with my district tax office beforehand?

At the end of each period when VAT/PAYE returns have to be made will revenue notify me before they fall due and send out details of what I need to send back? (once I have registered) (trying to do as much as possible myself!)

Is there any benefit in keeping my salary lower and leaving money in the business after year end? I know corporation tax is only 12.5% but is there any way of getting that money out of the business?

Sorry about all the questions, I've gone back ages and I am happy enough with the set up bit but figuring out the running part not so much. I just have visons of it being the 31st of October and going oh my god I never knew I had to do that!

Thanks for reading!

 

[BrenG]

First of all (although I'd prefer to stay a sole trader) the company where I have a really good offer from is pushing for a company to be set up.

See many previous posts on the downside of setting up and running a company for a relatively small operation. Ideally start off operating as a sole trader.

I've googled and come up that I'll need to complete Form STR and TR2 for revenue and can buy an off the shelf company from companies office.

It's no longer that easy to set up and operate a company. because of the strict reprting requrements and heavy fines for late filing etc. unless you are very experienced you will need to employ the services of an accountant.

Is the TR2 all I need to register me for VAT and PAYE? I will be the only employee of the company

See comments above re accountant. Even with some prior experience I ended up getting a fine for missing out on some essential forms.

I'll be a director and an employee but when I pay PAYE on whatever salary I pay myself will I pay PRSI at the A or S class?

You will be an employee of the company and pay A1 class.

If I work from home - maybe 10% of my total working hours - can I claim a % of ESB/Heating as an expense of the business?

Yes the Revenue will normally allow a reasonable level of these expenses to be offset. Again the accountant will be in a good position to advise you on what level would be acceptable to the Revenue.

And is this something that needs to be agreed with my district tax office beforehand?

No. it's totally up to you to make your own estimation of what is a legitimate tax expense. The revenue will not agree any prior arrangement on these issues. Another reason to employ an accountant.

At the end of each period when VAT/PAYE returns have to be made will revenue notify me before they fall due and send out details of what I need to send back? (once I have registered) (trying to do as much as possible myself!)

VAT /PAYE returns are fairly straightforward. You will receive the return forms and Bank lodgement forms monthly and you will also be requred to keep records yourself for possible inspection by the Revenue. Again the accountant could st you up initially and yu would have no problem in making the returns yourself from there on.

Is there any benefit in keeping my salary lower and leaving money in the business after year end? I know corporation tax is only 12.5% but is there any way of getting that money out of the business?

see comment above re downsides of incorporation. Only real way of taking money out of the company is salary or dividend both of which will incur tax at marginal rates. If you are putting in initial capital however there is some benefit in putting in loan rather than share capital as loan capital can be withdrawn without incurring tax.

As I said above you really need a good accountant to give you the best advice before progresing. Good Luck

 

[simplyjoe]

As a proprietory director you will pay class S PRSI NOT A.

 

[hhhhhhhhhh]

You will be an employee of the company and pay A1 class.

You will be on class S

Go to a company formations company, they will be much cheaper than an accountant.

You can do the day to day returns your self if you have any accounting experience.

Ask someone on the accounting forum on boards.ie to go through the first few returns with you until you are comfortable.

Companies setup for contracting have a small amount of transactions, so should not really require an accountant.

 

[simplyjoe]

You will be on class S

Go to a company formations company, they will be much cheaper than an accountant.
You can do the day to day returns your self if you have any accounting experience.
Ask someone on the accounting forum on boards.ie to go through the first few returns with you until you are comfortable.
Companies setup for contracting have a small amount of transactions, so should not really require an accountant.

Bad advice. Always use a qualified accountant. Shop around and/or get a referral. I am an accountant and it is unreal the mess that is made when people try to do their own accounts/filing. Fines, undeclared taxes, etc..

 

[extopia]

Bad advice. Always use a qualified accountant. Shop around and/or get a referral. I am an accountant and it is unreal the mess that is made when people try to do their own accounts/filing. Fines, undeclared taxes, etc..

Make that a good qualified accountant. With all due respect, not all qualified accountants are great at what they do. Ask someone you trust for a recommendation.

 

[hhhhhhhhhh]

Bad advice. Always use a qualified accountant. Shop around and/or get a referral. I am an accountant and it is unreal the mess that is made when people try to do their own accounts/filing. Fines, undeclared taxes, etc..

Doing your accounts is very simple.

A simple excel spreadsheet to record purchases and outgoings.
Have this linked in to a spread sheet, that pulls out the figures for the cashflow and P&L.

VAT is nothing, one simple form every 2 months.

Paying your self again simple http://www.welfare.ie/topics/prsi/index.html
http://www.welfare.ie/calculators/prsi_calc_07.html

Corporation Tax & Prem Tax again simple
[broken link removed]

CRO
A form once a year.
You can avail of the audit exemption and only submit a balance sheet.

This is a company setup to contract, so there will be very few transactions.

In fairness simplyjoe,
If you are only dealing with people who have made a mess of their account,
it reflects badly on you.
As obviously they are in a state of deperation and that must be the type of business you achieve

 

[ubiquitous]

Doing your accounts is very simple.
...VAT is nothing, one simple form every 2 months....

Paying your self again simple ...Corporation Tax & Prem Tax again simple
...CRO A form once a year.

Balderdash, to the point that I suspect this might be a troll.

In fairness simplyjoe,
If you are only dealing with people who have made a mess of their account,
it reflects badly on you.
As obviously they are in a state of deperation and that must be the type of business you achieve

This imho is perilously close to breaking the "dont attack other posters" posting guideline.

 

[hhhhhhhhhh]

Balderdash, to the point that I suspect this might be a troll.

100% stand behind the simplicity of doing your own accounts.
I personally know 20 people, with out even looking who do their own accounts, several friends who are accountants who would back me up on this.
Don't forget it is a simple contracting company, very few transactions.

This imho is perilously close to breaking the "dont attack other posters" posting guideline.

He stated the type of clients he has, to justify calling my advise bad, I gave my interpretation of this statement.

 

[ajapale]

,

please observe the posting guidelines and refrain from making personal attacks on other posters.

In fairness simplyjoe,
If you are only dealing with people who have made a mess of their account,
it reflects badly on you.
As obviously they are in a state of deperation and that must be the type of business you achieve

aj

 

[Fluffy2006]

Hi everyone, thanks for all the replies.
I think, even though I could probably do most of the work myself but I will go to an accountant to get the company set up and have a training session - if such a thing is possible - at the same time so I can do the day to day stuff myself.
I do think it would be quite straight forward but I'd rather err on the side of caution when starting out - just in case! Thanks to you guys I will be rather more knowledgeable when I do meet with someone!

 

[ang1170]

There's an element of truth on both sides of this.

My strong advice would be:

- use a company formation agent for the CRO stuff
- register yourself with Revenue: it's a single, simple form: no point in paying someone to do it
- get advice from an acountant on what accounts you need to keep
- get them to set you up with a simple accounts system
- run the accounts and payroll yourself
- make VAT/PAYE returns etc. yourself (very simple if done online)
- check in periodically (two to four times a year?) with your accountant that everything's on course

Bottom line: for a simple company, accounts and returns ARE very simple, BUT you'd be mad not to get professional advice on getting you going and checking up every so often.

I've just gone through this and so far (six months in) it's cost me less than €500 to form the company and do all of the above. Best money I've ever paid: trying to do everything myself would take huge amounts of time and I'd probably screw up.