Your accountant maybe?...Can anyone help me?...
Hi,
I'm an Irish contractor working in Ireland, who has set up his own company and all that. I am confused about the issue of expenses. It seems to me that expenses are reimbursed and that no expenses actually cost anything. I am sure i'm missing something here...
If I buy a 30 euro book for my company say, then I spend 30 euro. Now this is a business expense, and therefore comes off of my income. My income minus this 30 euro is then taxed and my net profit is attained. But then according to my accountant's example this 30 euro is RE-ADDED to my net profit. Isn't this mad?? It seems to me like the book is essentially free coz you lose 30 euro buying it, then the 30 euro comes off the income to give you a lower value to be taxed on, and then its re-added gross at the end, in effect cancelling your purchase of it while still lowering your tax. What am i missing!
This has to be an incorrect interpretation. Can anyone help me?
Thanks
Or 46% off... if you include PRSI & Health Levy at 5%
From the sound of it you are not the only one confused. I don't think you should be guided by some of the above posts - the logic and calculations in them I cannot fathom. I believe you need to speak with your accountants and if they insist of speaking "accountingese" rather than English, find a different firm. You are their client and you are paying them.Hi,
I'm an Irish contractor working in Ireland, who has set up his own company and all that. I am confused about the issue of expenses. ...
Thats not true as its company property.It's free to you as an individual, ...
Thats not true - only allowable expenses incurred solely and exclusively in the discharge of your duties to the company are tax-free.... Expenses are tax-free for an employee ...
That part sounds fine. The rest of the discussions about PRSI, health levies, etc. has nothing to do with your original questions....You pay €30 for it out of your own money. You claim it as expenses at the end of the month. Your company then gives you €30. So it hasn't cost you anything but your company is down €30. The company can now claim this as an pre-tax expense just like any other business expense. ...
Technically speaking it is company's property, but if you are owner/manager of your own business and you buy a reference book to aid your business then you have sole use of it and you didn't pay for it out of your own taxed wages....
Thats not true as its company property.
I didn't mention otherwise...
Thats not true - only allowable expenses incurred solely and exclusively in the discharge of your duties to the company are tax-free.
Originally Posted by jkenefick http://www.askaboutmoney.com/showthread.php?p=670215#post670215
If I buy a 30 euro book for my company say, then I spend 30 euro. Now this is a business expense, and therefore comes off of my income. My income minus this 30 euro is then taxed and my net profit is attained. But then according to my accountant's example this 30 euro is RE-ADDED to my net profit.
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