Sole Trader Tax...Pls Help!!

A

arbarg

Guest
Hi,

I need to know what rate of Tax will i pay as a sole trader
eg: if I make €100 how much of this should i put by as tax??

Also, can I claim petrol as my business involves a lot of travelling and canI claim phone bills etc.

I dont have a head for a lot of the jargon used on the revenue site and on some posts so I couldn make out what some people were on about, I just need to know in plain english what percentage of my earnings will i have to allow as tax if I am working as a sole trader .

I work as an IT Support Specialist so i only bill for services ( no goods at all)
Please Help!!
 
I put away 50% of my earnings. That covers 41% tax, 5% PRSI/Health and new levies (at 1.66%) - that's too much to put by, but it gives me a comfort zone. I'd rather have put away too much than too little. Also, put away your VAT payments any time you get paid.

You can claim petrol for business but you have to keep records of mileage and calculate exactly what portion is used for business. You can claim phone bills, but again, only for business purposes. If, for e.g. you pay €25 a month for your phone rental and 50% of your calls are business-related, then you can claim €12.50 per month. Keep all receipts.
 
41% for tax???
Is that accurate. So if i make 30K that means almost half of that is tax.???
It wouldn be worth working?
 
Your tax bands are the same as everyone else's. 30k would be lower tax band. You also need to pay preliminary tax. But you dont get a tax allowance ala PAYE as you can deduct expenses such as car (over depreciating period) and any cost such as petrol or any cost incurred in running your business. like watersprite says you need receipts to back up deductions. I dont know if your VAT registered but if so that would be 13.5% for services. To be honest you definitely need an accountant. It will pay for itself to have it done correctly as a good accountant will know all deductions possible to save you tax. They can tell you how to maintain your accounts or do your own VAt returns in the future. If you dont know what your doing it will probably cost you in one way or another.
Good luck
 
41% is the higher rate of tax. 20% is the lower rate. 41% kicks in for amounts over €36,400 for 2009. You also have the tax free allowance (but not PAYE allowance if you are self-employed). See here (Revenue site, but very straightforward). If you make €30k a year, then you don't have to register for VAT (if you don't want to) and I'd put away 30% of earnings (IMO) to cover tax @20%, PRSI@5% and levies (1.67% blended for 2009).

You should look at the citizens' information website, which is more user-friendly than Revenue's one. But it sounds like you need to look into this more closely if you are going self-employed. Self-employed tax is, as you probably know, self-assessed so you need to know at least the basics.
 
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