Advice on setting up a business as an extra income

L

living

Registered User
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16
Hi,

Just wondering if anyone can offer some advice.
I work full time but would like to earn some extra income on the side.

I have ideas for products I would like to sell and wondered what the best way to go about it was.

What sort of company would I need to form?
And for tax purposes can I do this whilst remaining a PAYE employee?

Any help greatly appreciated

Thanks
 
The first question is whether you really need a company? There are loads of threads on the forum dealing with this. However given you have a fulltime job you are probably on the high tax band already which means any profit you make from the new business would be taxed at 48%.
There are loads of company formation websites in Ireland - average cost is around 200-300 euro to set up a limited liability company.

You can still remain a PAYE employee regardless of having a company for your extra income.

Best of luck!
 
Best bet is to register as a sole trader. You can do this while remaining a paye employee - once your employer doesn't mind.

Imho, forming a company at this stage would be madness.
 
Log on to www.revenue.ie

There is plenty of information about starting your own business and about your tax implications.

You will need to register as a sole trader and register for income tax.

Good luck
 
Conshine said:
Why??

If that is the attitude that everybody takes, the country will very quickly go down the pan!

Good luck Ubiquitous - Go for it!
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Its nothing to do with attitude, or being positive or negative. As someone who earns a living from providing advice and compliance services to small businesses and start-ups, I have seen many, many people who enthusiastically formed limited companies for start-up ventures, only to regret doing this when their business plans evolved over the first 3/6/12 months. If you read the AAM archives, you will find plenty of people in this category.

In most cases, its far simpler, cheaper and safer to operate as a sole trader in the early stages. Hence my recommendation.

And if my advice is too negative for you, then you can ignore it.
 
millertime said:
There are loads of company formation websites in Ireland - average cost is around 200-300 euro to set up a limited liability company.

You can still remain a PAYE employee regardless of having a company for your extra income.

Best of luck!
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Just logged on here to look into exactly the same issue.

Could you expand on the points made above for me Millertime?

If I set up a LTD Co. do I then pay myself as an employee (a very small amount if anything at all) avoiding extra income tax and keep the profit from the company for myself and pay corporation tax on it at a lower rate?

What's the best way to get set up?
 
Thanks for the advice guys.

I dont expect my turnover to be very high, certainly not near the threshold to register for VAT, so I suppose I dont need to register for VAT then as a sole trader.

If I were to buy product wholesale from the UK or another EU country and if VAT was not charged (though I presume it always is), do I then have to pay the VAT here or do I just declare my total turnover and profit etc at year end?
 
PetrolHead said:
If I set up a LTD Co. do I then pay myself as an employee (a very small amount if anything at all) avoiding extra income tax and keep the profit from the company for myself and pay corporation tax on it at a lower rate?
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If you form a Ltd company, then the company keeps the profits after paying corporation tax not you. If you subsequently want to take some of the profits, the company will have to pay them to your and you will pay income tax on top of the corporation tax already paid. Furthermore, depending on the business you are in there may be additional taxes to be paid on retained profits so it's not as simple as you may think. Do some reading of older posts on this site and/or get professional assistance as necessary.
 

I agree with Ubiquitous, only form a company if you are sufficiently confident that the profits will be high enough that paying tax at 48% will be a no-no. If it is going to be a hobby trade with a modest (say single figure profits), a company would not be the way to go
 
Hi

New to site so not sure if this is where I should post this question but, in relation to VAT, are there some services which are VAT exempt, for example I know that Training is VAT exempt, does anyone know what other services would be VAT exempt or where I could find a list?
 
AFAIK training or education delivered in a class-room environment is zero rated for VAT purposes (not exempt) but that any materials supplied (e.g. training aids, kits, answer sheets, etc.) must have VAT charged at 21%.
 
demiL said:
does anyone know what other services would be VAT exempt or where I could find a list?
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See [broken link removed] and look up the specific products and services you are interested in and it will give the appropriate VAT rate (although you should take note of the comments at the top of the page).
 
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