# Sole Trader with No Income



## bearaman (4 May 2007)

Hi All,
I'm about to set myself up as a sole trader while keeping my full-time job. I'm wondering what happens if I don't have any income as a sole trader this year or any year. Do I still have to make a tax return? Do I still have to use an accountant to do this? Can I do my taxes myself online if they're straightforward?
Thanks,
Bearaman


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## setemupjoe (4 May 2007)

If you carry out trade as a sole trader you must file taxes and keep proper records and books.if your running at a loss you can carry it forward against future profits.an accountant is essential in your case i think at least for first few years ,then you can learn to do your own taxes.GooD Luck !

"I'm wondering what happens if I don't have any income as a sole trader this year or any year". 

you should have income ! just because your expenditure might be more than your income and you run at a loss e.g. you sell 1000 euro worth of goods ,but youve spent 1500 euro on all expences and stock ,your income is still 1000 euro for your accounts you carry forward the 500 euro loss to your next year accounts,if you make a profit of 3000 euro in year two you can offset the previous loss before paying tax on net profit.
if you dont antisipating a profit ever i dont see the point ?


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## hhhhhhhhhh (4 May 2007)

bearaman said:


> Do I still have to make a tax return?


Yes



bearaman said:


> Do I still have to use an accountant to do this? Can I do my taxes myself online if they're straightforward?


You can do it yourself no need for an accountant, with no income your accounts should be very straight forward.


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## bearaman (4 May 2007)

Thanks for the info,
I was asking because once I do set up as a sole trader, I may just forget the whole thing and not bother looking for business. I didn't want to have the hassle of doing books with no income or profit at the end of the year.
You said that you can do your taxes yourself. Where can I read up a bit more on how to do this?
Thanks,
Bearaman


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## dublinsense (4 May 2007)

You don't really need to "set up" as a sole trader, just start doing business and pay tax on any earnings when you recieve the cash.

I think the point is that if your thinking of being a sole trader as a way of writing expenses against tax, when you expect no income / don't intend on making the business a success, then thats Tax Evasion. If you start a business and write off the tax while building the business its Tax avoidance, which Is Legal.

To answer you question tho - Once you sign up to ROS.ie you can in theory fill in a return with a bunch of zero's and it will only take a few minutes. 

Read up on revenue.ie how to do your taxes. However if you start making decent money its worth running them by an accountant.


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## Marianne S (4 May 2007)

I would advise you to go to an accountant before you start. My boyfriend had a consultation with an accountant when he became self-employed and she was fantastic, she spent an hour and a half explaining how to do a tax return and even gave him sample accounts he could refer to. It's expensive to get an accountant to do accouns for you and it's straightforward once you know what your doing but it's a bit of a minefield if you've never done it before. My bf wasn't charged for his consultation but if they do charge you it could be 100 euro an hour, I still think it's worth it. I'd also recommend you keep on top of your accounts, file away receipts etc carefully as it can be very difficult to go back to it months later. By the way he had to register with the companies registration office (www.cro.ie) because he operates under a name different to his own name and he had to register for VAT, talk to an accountant


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## ubiquitous (8 May 2007)

dublinsense said:


> You don't really need to "set up" as a sole trader, just start doing business and pay tax on any earnings when you recieve the cash.


This is incorrect. You are legally obliged to register for self-assessment tax using form Tr1/Tr2 as soon as you commence self-employment.


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## NEVOSON (16 May 2007)

Could someone please clarify my position. I am a PAYE earner but now have the opportunity to earn a little bit of additional other income selling books. How do I account for the tax on this additional income? Thanks.


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## vector (17 May 2007)

ubiquitous said:


> This is incorrect. You are legally obliged to register for self-assessment tax using form Tr1/Tr2 as soon as you commence self-employment.



Are you really, really sure, that you have to use that TR1/TR2?

If you look on forums when people talk about sole traders the view seems to be just:

-CRO RBN (if not using own name)
-Revenue Annual return (Form11E/Form 12 before oct 31st)

from ime to time someone mentions the TR1/TR2
and indeed looking at them they do seem necessary

however lets take the classic example of a PAYE person, who has a sideline of [providing some service, like fixing computers], its not alot of money, or hastle, indeed it would be tempting to not declare it at all, but if he wants to do the right thing, why can't he just declare it under Section 419. INCOME FROM SOURCES NOT SHOWN ELSEWHERE, or some other vague section. I mean if the income is minute, and he doesn't wish to claim any expenses, or even for stationary.

People worry about becoming a registered sole trader, will it affect their state pension entitlements? or their "dole" (if required) who knows these things, an accountant does but he charges, and the income is so minute.


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## ubiquitous (17 May 2007)

vector said:


> Are you really, really sure, that you have to use that TR1/TR2?



Yes. It is a legal requirement. If you have any doubts on this, ring the Registration Division of your local Revenue Office.



vector said:


> ...if he wants to do the right thing, why can't he just declare it under Section 419. INCOME FROM SOURCES NOT SHOWN ELSEWHERE, or some other vague section....


One very simple reason: There are specific areas in Forms 11& 11E tax returns that refer to trading income. It is compulsory to complete these if the taxpayer is in receipt of such income. The Revenue routinely reject tax returns where these areas have been incorrectly left blank. The usual policy is to return the forms to the taxpayer for proper completion.



vector said:


> who knows these things, an accountant does but he charges, and the income is so minute.


So? Do you expect accountants to work, and provide their expertise, for free?


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## vector (17 May 2007)

>Do you expect accountants to work, and provide their expertise, for free?

no, of course not, accountants are people and deserved to be paid for any service they provide. My problem is with the revenue. I am obliged to submit returns to them (Form 12) but they won't answer queries, its like trying to play football without knowing the rules. What I'd like to see is a real-world FAQ page on the revenue website, a sort of "sticky" to use forum terms. 

Is this a dream? do accountants not want that because it would reduce their business? Do the revenue not want it because it would reduce penalties? who knows, and alas who cares, all I know as a person who is obliged to deal with revenue is they should make compliance easier for me.


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