Self Employed tax

H

helpmeplease

Guest
Hi, I am new here

I am self employed and on the back to work enterprise allowance. I was just looking to estimate how much tax I will be paying. I will get an accountant to do it properly but just looking for abll park figures now. As far as i know the BTWEA is tax free. Last year i earned about 19k, I am not 100% on my expenses yet but i expect them to be 350-450. I am also single with no children.

Would i be right in presuming that i get a tax credit of €1830? That along with my expenses would be deducted from the 19k and i pay about 26% tax on the rest?

Thanks
 
the 1830 is deducted from from your tax - not from your taxable income
 
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so without being too exact would it be be: €19,000 - €400 expenses = 18,600, 26% tax = €4836 - €1830 = €3006
 
helpmeplease said:
so without being too exact would it be be: €19,000 - €400 expenses = 18,600, 26% tax = €4836 - €1830 = €3006
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Yep, that's essentially how it would be calculated.

But really, only €400 of expenses on 19k of income, surely there's more somewhere!?
 
As i say im not 100% sure of expenses, id rather underestimate them at the minute and get a nice nice surprise. There are lots of missing receipts, im just hoping they where not binned.
 
mandelbrot said:
Yep, that's essentially how it would be calculated.

But really, only €400 of expenses on 19k of income, surely there's more somewhere!?
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Speaking of expenses, what is the position on car expenses? There are about €500 in reciepts for petrol but as i used the card it gives the amount spent in the garage rather than saying "€40 petrol" Will this be enough? Also can i claim back for my tax and insurance?
 
helpmeplease said:
Speaking of expenses, what is the position on car expenses? There are about €500 in reciepts for petrol but as i used the card it gives the amount spent in the garage rather than saying "€40 petrol" Will this be enough? Also can i claim back for my tax and insurance?
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It might be worth paying someone who knows what they're doing a few quid to put together a set of Income & Expenditure accounts, and fill out your tax return for you - it may quite easily pay for itself, and give you some peace of mind that things have been done correctly.

Having said that, to answer your question, in a case like yours (i.e. small, non-VAT registered) I don't see why not, as long as what you're claiming for is reasonable in relation to your line of work. (Like if you do web design from home, and never have to do any work or travel to meet anyone, then you can't really justify any petrol expense).

As for motor tax and car insurance, the commercial element can be claimed, but if you only had personal insurance (Class 1 I think?), then there is no business expense if you see what I mean...
 
T McGibney said:
Have you a source for this specific point?
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Nothing specific, just the general rule under S.81(2) TCA '97 - i.e. "wholly and exclusively".

If the OP had a car prior to starting the trade, taxed and insured for private use, and the carrying out of the business didn't result in an increased tax / insurance, I don't really see how one could argue any element of the expense was wholly and exclusively for the purposes of the trade..?
Maybe there's Case law in this area?

(At the same time though I wouldn't split hairs over it, if someone wanted to claim a proportion of it!)
 
mandelbrot said:
It might be worth paying someone who knows what they're doing a few quid to put together a set of Income & Expenditure accounts, and fill out your tax return for you - it may quite easily pay for itself, and give you some peace of mind that things have been done correctly.

Having said that, to answer your question, in a case like yours (i.e. small, non-VAT registered) I don't see why not, as long as what you're claiming for is reasonable in relation to your line of work. (Like if you do web design from home, and never have to do any work or travel to meet anyone, then you can't really justify any petrol expense).

As for motor tax and car insurance, the commercial element can be claimed, but if you only had personal insurance (Class 1 I think?), then there is no business expense if you see what I mean...
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I will be getting somebody that knows there stuff to do it I was just wondering what sort of figure i would have to pay. I wasnt very good at putting money aside for tax purposes.
 
helpmeplease said:
I will be getting somebody that knows there stuff to do it I was just wondering what sort of figure i would have to pay. I wasnt very good at putting money aside for tax purposes.
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An accountant told me to set aside 25% of takings to cover tax expense and that way I wouldn't be short. Don't know if that's all business or just me (Beauty).
 
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