Starting a New Business

Many agree that now is the best time to start a new business. Various levels of finance are available to small business and these include the following:

Available Financial Supports:

• Back to Work Enterprise Allowance:  payable by the Department of Social Welfare.  You can trade as self employed and retain 100% of your social welfare payments for year 1 and 75% in year 2.
• Capital Grants for Capital Expenditure:  available from your LEO (Local Enterprise Office). You may receive finance for capital expenditure i.e. equipment, websites etc
• Banks  & Credit Unions:  You will need a business plan, the more detail the better.
• Seed Capital: Does your business qualify for seed capital relief to generate a refund of your PAYE tax paid for the past 6 years

 

 

Steps in Business Start Ups

When starting your own business, it is very important that you are aware upfront of your obligations.
The first steps include:

1.  Sole Trader/Partnership or Company?

• Sole Trader (just yourself, no partner in the business)
• Partnership (2 or more individuals)
• Limited Company

There are advantages and disadvantages to all options. Ideally this should be explored with a taxation consultant or accountant before putting the correct structure in place.

2.  Registering your business name if applicable

You can register your business name at  www.cro.ie. 

This is not applicable for a limited company unless you may wish to use a trading as name too.

 

 

3.  Registering for the correct Taxes

Income Tax

All businesses are liable for income tax  see  www.revenue.ie 

• Form TR1 for soletraders and partnerships
• Form TR2 for companies

VAT

You will need to register for VAT, if your sales (not profits) exceed certain thresholds in a 12 month period.

Supplying services and you anticipate your sales will exceed €37,500, then you should register for VAT.  Supplying goods and you anticipate your sales will exceed €75,000 in a 12 month period, then you should register for VAT.

PAYE/PRSI

You will need to pay PAYE and PRSI,  where you hire an employee in your business.

Employers are obliged to pay Employee’s PRSI at either 4%, 8.5% or 10.75% on an employee’s gross wages.

RCT

Building Industry where you intend to hire sub-contractors. This is very important as there are penalties for not being RCT compliant.

4. Health & Safety Report.

Every new business (sole trader included) is required to have a health and safety statement for their business.

Check out guidelines and samples on the website link below:

www.hsa.ie  https://www.hsa.ie/eng/Small_Business/Getting_Started/Safety_Statements_Made_Simple/

5. Books & Records

You must keep full and accurate records of your business from the start.

You need to do this whether you send in a simple summary of your profit/loss, prepare the accounts yourself, or, have an accountant do it.

The records you keep must be sufficient to enable you to make a proper return of income for tax purposes and will depend on the nature and size of your trade, business or source of income.

The records kept must include books of account in which:

• All purchases and sales of goods and services.
• All amounts received and all amounts paid out.
• Recorded in a manner that will clearly show the amounts involved and the matters to which they relate.
• All supporting records such as invoices, bank and building society statements, cheque stubs, receipts, rent books, etc. should also be retained.
• You must keep your records for six years unless Revenue advises you otherwise.

For more information see www.revenue.ie  – A guide to self assessment IT10

6. KNOW your deadlines

VAT

Bi-monthly return 19th of the following month (i.e. July/August 2018 due by 19th September 2018)

Returns and payments that are made electronically the deadlines for returning & payment  will be the 23rd day of a month. This has the effect of extending existing filing deadlines by four days for VAT and nine days for RCT and PAYE.  Concessions have been given to many small business now who now only need file their returns every 3 months. Check with your local tax district which deadlines apply to your business.

PAYE/PRSI

Monthly P30 –  14th following month  (example:  Sept 2018 P30 due by 14th October 2018)

Income Tax

Electronic pay & file at www.ros.ie  Deadline 16th November 2018