I'm thinking of setting up a homebased business which initally will not be making much profit (starting small). I'm trying to find out how this will effect our joint tax situation. I am currently PAYE but will fininsh work soon. If I go ahead with the business idea and register for tax as a sole trader - how does this effect our credits etc and also if I am not generating much (if any profit) for the first few years will I have to pay PRSI from money I am not earning? Sorry if this sounds a stupid question but have surfed around and can't find the answer.
Me sole trader - hubby PAYE
- Thread starter Joshnot
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I did the same thing, left hubby with my tax credits. Made a loss in the first year so did not pay any tax (got a refund of tax earned PAYE that year 
)
Year two made small amount of profit and paid paye and prsi on the money I earned.
Not an expert but don't think you pay PRSI unless you make a profit (I did not in the first year).
On a different note, I only got an accountant after 2 years in business - big regret, it would have saved me huge worries and headaches had I got one from the start.
If you have any questions, give me a shout. Not an expert but have done the same thing
)Year two made small amount of profit and paid paye and prsi on the money I earned.
Not an expert but don't think you pay PRSI unless you make a profit (I did not in the first year).
On a different note, I only got an accountant after 2 years in business - big regret, it would have saved me huge worries and headaches had I got one from the start.
If you have any questions, give me a shout. Not an expert but have done the same thing
You can allocate your tax credits and low rate threshold to your husband, just call the Revenue on their PAYE lo-call number to ask them to do it. At the end of the year you will submit a joint tax return and if you have made a profit you will then pay tax/prsi on your income from the business (this applies in year one only, for year 2 onwards you will pay preliminary tax on your profits but that's not an issue for now, your accountant will advise you on that).
Regarding the PRSI, you will pay 5% on your income/profits. If you are not making profits you will pay the minimum contribution of €253
As Sue97 says, very important to get an accountant as getting things wrong can be very costly. If you only have a very small business the accountancy fees should be relatively low and a good accountant will be worth the money -try and get one that has been recommended to you.
Regards
podowd
www.prima.ie
Regarding the PRSI, you will pay 5% on your income/profits. If you are not making profits you will pay the minimum contribution of €253
As Sue97 says, very important to get an accountant as getting things wrong can be very costly. If you only have a very small business the accountancy fees should be relatively low and a good accountant will be worth the money -try and get one that has been recommended to you.
Regards
podowd
www.prima.ie
The PRSI rate is 3% subject to the minimum. The additional 2% Health Contribution will only apply if income exceeds the relevant threshold.
No, PRSI for self-employed is only payable if income exceeds €3,174. Then it's 3% or €253 whichever is the greater. So at income of €2,500 theres nothing (under the €3,174) At income of €4,000 theres €253 ( the minimum as 3% of €4,000 would be under the minimum) At income of €10,000 its €300 ( 3% of )
However there are other conditions, calculations and existing PAYE income on which PRSI already paid can affect the calculation too as the mimum may have already been exceeded.
If you earn nothing then there is no PRSI. This does bring the issue of a self-employed person having possible gaps in their contribution record in years when they are loss making or under the minimum income. Remember self-employed PRSI is only for pension benefits. It does not give any entitlement to unemployment or disability supports.
F
fintans
Guest
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Remember self-employed PRSI is only for pension benefits. It does not give any entitlement to unemployment or disability supports.[/quote]
The above statement is not accurate - self-employed PRSI payment ensures maternity benefit entitlement - my self employed Sole Trader wife currently availing of this handy €280 for 26 weeks!!
Remember self-employed PRSI is only for pension benefits. It does not give any entitlement to unemployment or disability supports.[/quote]
The above statement is not accurate - self-employed PRSI payment ensures maternity benefit entitlement - my self employed Sole Trader wife currently availing of this handy €280 for 26 weeks!!
The above statement is not accurate - self-employed PRSI payment ensures maternity benefit entitlement - my self employed Sole Trader wife currently availing of this handy €280 for 26 weeks!![/quote]
Correct, MB is included, but unemployment or disability are not.