Company Director & Sole Trader

I

irish_girl

Guest
I am one of the two directors of a limited company. We have registered for VAT, Income Tax and Corporation Tax. We have also have registered as an Employer, we don’t have employees, just the two of us as directors. We had little sales since incorporation and since April 2010 we haven’t paid ourselves any salaries, and since then, returned the P30 forms with “0”. We are thinking to close down the company by the end of the year.

In June 2010 I’ve registered as a sole trader and started a craft business.

I believe there is a conflict in here, about myself being registered as employed by the company and also being self-employed.

Can anyone advise me on what options do I have here? Many thanks.
 
Two different businesses, two different situations.

Revenue will want to know your total nett income, which is where matters get resolved, and your directorship/company employment seems straightforward.

The only fly in the ointment here is whether by not paying yourself the minimum wage for your hours worked you may be in breach of company legislation - I am not competent to say.

For a sole trader, this will involve a set of accounts showing your profit for the year after allowable tax deductions and write offs are taken out.

If you're working from home and using your private transport in the course of your business, you may write off a proportion of these running costs as business expenses.

Take note that this does not mean EVERY outgoing can be written off.

Re the write-offs and preparing the accounts, take the advice of a competent accountant used to dealing with sole traderships.

In either case you are turning over so little it seems unlikely that an audit would be required, but talk to the Revenue on this.

ONQ.
 
Thanks for advice, ONQ.

I've tried very hard to make a living and not have to claim assistance. I am in a difficult situation as regards to sales from my craft business, too. I work hard to push it forward, but in the current climate sales are very poor indeed.

I'm thinking to apply for unemployment assistance, but with my current status of being a company director and self-employed as well might not please the assesors of my application. Is there anything I can do about it? Can you give me any advice on this issue?

Many thanks.
 
onq said:
The only fly in the ointment here is whether by not paying yourself the minimum wage for your hours worked you may be in breach of company legislation - I am not competent to say.
Click to expand...

It wouldn't be a Company Law issue per sé, but an offence under the Minimum Wage Act, but that's neither here nor there anyway, as a proprietary director is an Office holder, not an employee within the meaning of the Minimum Wage legislation. (Hence they pay self employed PRSI etc...)
 
You're very welcome Irish Girl

I strongly suggest you contact your local MABS office and talk to your local Community Welfare Officer.

If you have -

- less than €20,000 in savings
- no car loan on the mortgage
- no second home or holiday home

then you may be eligible for assistance, but there are other issues to address.
The above may not bar you from this or other assistance you could receive but you need to talk to people to find out.

Equally there are ways of saving on costs and overheads on an ongoing basis while still maintaining reasonable services and supplies to your business and home.
For example, some people run a phone and fax line as a Business customer - this used to cost me €100 each a month.
I now run a single residential line for €50 a month - all local and national calls under an hour duration covered.

My weekly household grocery bill used to top €160 for a small family.
Now it seldom exceeds €80 and we still eat a balanced diet.
(I've even found it hard to keep myweight down this year!)

Small things you might think, but (€320 + €100) €420 a month is €5040 a year, which can make all the difference to a small business or sole tradership.

Most self- employed people are fiercely independent and hate even contemplating state assistance, but in this present climate there are a lot few professionals and self-employed persons in huge difficulty - many simply through the economic downturn, not because they lived beyond their means.

So assuming you have paid your own tax, VAT and PRSI over the years, and you satisfy whatever criteria are required do not feel you are going cap-in-hand to the government.
You are a taxpayer and you are as entitled to your rights as the next person.

My best advice is that you should act promptly to preserve what financial assets you have left.
I hope it goes well for you and you might consider reporting on how you get on here on AAM to inform the readers and posters.

ONQ.
 
mandelbrot said:
It wouldn't be a Company Law issue per sé, but an offence under the Minimum Wage Act, but that's neither here nor there anyway, as a proprietary director is an Office holder, not an employee within the meaning of the Minimum Wage legislation. (Hence they pay self employed PRSI etc...)
Click to expand...

I haven't (yet) read all the relevant employment acts as is the practice with black-letter lawyers as I'm not a solicitor.

Its always the case that the devil is in the details, so I'm greatly obliged for that advice mandlebrot.

:)

ONQ.
 
Thanks again, ONQ. Great advice!

Spot on with the cost savings measures - we haven't got a business phone line and our weekly household grocery bill is in the same range €80-€100. This works alright and we manage to keep our costs down, but you're right about preserving the financial assets :( whatever is left of them. It's not going to last forever...

So, I've got an appointment to see the local Community Welfare Officer later this week. We'll see how that goes, taking one step at the time...

Many thanks,
irish girl
 
onq said:
The only fly in the ointment here is whether by not paying yourself the minimum wage for your hours worked you may be in breach of company legislation - I am not competent to say.
Click to expand...


The jails would be full if that were true!
 
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