D
Dillon R
Guest
Hi,
I started working for the first time as a contractor in November 2007. As such I was aware that I would need to register as either a Sole Trader or a Ltd company. To date I have to date done neither (9months on) .
The reason being that I was under the impression that, as a sole trader, Income tax is payable by the 31st October following the year of trade. Therefore once my tax return for 2007 is submitted to revenue pre 31st October 2008 I would not have any interest to pay. Going forward with this idea, I did not see the huge rush to arrange my taxes as I was putting away a sizeable amount of income aside to ensure I could deal with this situation. However I was just made aware of the dreaded VAT.
I had no idea that I would ever have to deal with VAT, I taught that that was only for ltd companies etc, and not sole traders, however I found this was not necessarily the case. And that if your income was expected to exceed the threshold of €37,500 (service industry) you were required to register for VAT. I would expect to make in the region of €48,000 on my salary per annum, therefore I presume I must register for VAT.
The problem is because I have worked for 9mths not registered, I have not invoiced the company I'm working for the additional VAT onto my bill ever to date. So basically they have paid me without adding the VAT on that they should have, provided I was registered for VAt, which I should have been. So really my questions are thus.
1) INCOME TAX: Have I really messed up by not registering as a sole trader yet, or will it not matter too much because I have not been required to file a tax return yet. Will I be charged extra interest etc for not registering to date.
2) VAT: As I am expecting to earn more that the VAT threshold, do I have to register for VAT?
3) VAT: If I register for VAT, am I required to pay VAT on all earnings, or just those over the threshold (i.e. all 48,000 or the last 10,500 (48k-37.5k))
4) VAT: If I am required to pay on the entire €48,000 will I have to front the bill for the VAT I have not charged onto my bill to my customer? If the answer is yes, Is it acceptable to retrospectively charge the company I work for for the additional VAT that they were not charged for the previous 9 mths(they are VAT registered).
Basically through inexperience and naivety I am afraid that I have compromised myself hugely and don't know what I can do to fix this situation, or how bad this situation is. I have had no intension of not registering; I just put it off, thinking it wasn't as urgent a situation as it may be.
I may add I work for one company only, they are the source of all my income, no other.
Would appreciate any/all the experienced help and advice anyone can offer.
Regards,
Dillon R
I started working for the first time as a contractor in November 2007. As such I was aware that I would need to register as either a Sole Trader or a Ltd company. To date I have to date done neither (9months on) .
The reason being that I was under the impression that, as a sole trader, Income tax is payable by the 31st October following the year of trade. Therefore once my tax return for 2007 is submitted to revenue pre 31st October 2008 I would not have any interest to pay. Going forward with this idea, I did not see the huge rush to arrange my taxes as I was putting away a sizeable amount of income aside to ensure I could deal with this situation. However I was just made aware of the dreaded VAT.
I had no idea that I would ever have to deal with VAT, I taught that that was only for ltd companies etc, and not sole traders, however I found this was not necessarily the case. And that if your income was expected to exceed the threshold of €37,500 (service industry) you were required to register for VAT. I would expect to make in the region of €48,000 on my salary per annum, therefore I presume I must register for VAT.
The problem is because I have worked for 9mths not registered, I have not invoiced the company I'm working for the additional VAT onto my bill ever to date. So basically they have paid me without adding the VAT on that they should have, provided I was registered for VAt, which I should have been. So really my questions are thus.
1) INCOME TAX: Have I really messed up by not registering as a sole trader yet, or will it not matter too much because I have not been required to file a tax return yet. Will I be charged extra interest etc for not registering to date.
2) VAT: As I am expecting to earn more that the VAT threshold, do I have to register for VAT?
3) VAT: If I register for VAT, am I required to pay VAT on all earnings, or just those over the threshold (i.e. all 48,000 or the last 10,500 (48k-37.5k))
4) VAT: If I am required to pay on the entire €48,000 will I have to front the bill for the VAT I have not charged onto my bill to my customer? If the answer is yes, Is it acceptable to retrospectively charge the company I work for for the additional VAT that they were not charged for the previous 9 mths(they are VAT registered).
Basically through inexperience and naivety I am afraid that I have compromised myself hugely and don't know what I can do to fix this situation, or how bad this situation is. I have had no intension of not registering; I just put it off, thinking it wasn't as urgent a situation as it may be.
I may add I work for one company only, they are the source of all my income, no other.
Would appreciate any/all the experienced help and advice anyone can offer.
Regards,
Dillon R
Is it usual for the company in these cases, to be ok with being charged this VAT retrospectivily, or do they just go tell you to jump?