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I wouldn't see any point in setting up a limited company if you are the only employee and will "only" be earning €30k.
Fwiw, this isn't correct. Salaries are deductible from company profits for corporation tax purposes. Nobody in their right mind would go to the hassle of actually paying dividends to shareholders in such a small company.As I understand in the first instance the company will have to pay corporation tax, then any dividend paid, i.e. your salary, will be taxed. There is a double hit.
ExactlyEven as a limited company if you only have say two directors and given the size of the undertaking, anyone who lends you money would probably look for personal guarantees anyway thereby negating the protection of being a limited liability enterprise.
I can't see how being a sole-trader is particularly "dangerous"?
Fwiw, this isn't correct. Salaries are deductible from company profits for corporation tax purposes. Nobody in their right mind would go to the hassle of actually paying dividends to shareholders in such a small company.
remaining profit taxable to corporation tax at 12.5%What if at year end there is a profit?
Usually a good idea. That said if salaries eat up all profits year-in year-out, you would need to consider is there any point in having a company in the first instance. It certainly seems like a crazy option for a business earning only €30k per year.or would they have to sit down close to year end to ensure that the final salaries ate up any profit.
The 21% you are talking about is VAT. When you file your VAT return for fares you can deduct your VAT outgoings such as petrol, car repairs, expenses associated with running your business etc so you don't have to give 21% to the tax man.
Okay, thanks....sorry if I am coming across as thick! But I do need to know, say 30,000 for the first year but that could grow afterwards.
Am I right in saying that as a sole trader I can't claim vat back but I dont have to take it out of my earnings, just pay income tax?
If I have a company, I can lodge everything into a company account, pay myself a wage - minus PRSI and PAYE, and pay 12.5% on the profits but what way does VAT work there?
If a fare is €50, does that mean that because its a company, that 21% of that must be given to the tax man?
I think I am correct in saying that even if you weren't exempt from charging VAT as a sole trader you can be registered for VAT.
I think I am correct in saying that even if you weren't exempt from charging VAT as a sole trader you can be registered for VAT.
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