Is being a sole trader not worth it?

V

vector

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I have a PAYE job earning 400 a week, and so my employer pays a Class A contribution.

I also perform a service (IT nixer) that brings in less than 3174 per year.

On my last Form 12 return I just wrote that into Section 10 "Income from a trade or profession" and all was well.

THis year my nixer income is likely to be 7000, thats over the 3174 ceiling.

SO I think I have to send a TR1 Tax Registration Form to the Revenue, but I'm not happy about that. It looks like if I do I will have more work to do.

I'll have to complete a lenghty Form 11e instead of a Form 12
I'll have to pay a Class S contribution on my sole trader income (Class is near useless at the best of times, but its pointless for me as my employer is already paying a Class A)

I'm tempted to curtail my nixer and keep earning less that 3174

I need some words of wisdom or are there holes in my post?
 
So for a little hassle and to keep within the law, you're asking whether you should earn e3174 or e7,000 ?

Its not that much hassle. Earn the extra money. You'll be glad of it someday. (Do as you're doing - don't go to an accountant for your tax-return, it'll cost you too much (speaking as an accountant myself)).
 
thanks for the reply...
I note that on the Form 12 a taxpayer is allowed to have 2 seperate trades. I didn;t understand why, but after reading Tax books online, mostly from England and Wales I'm thinking....

If I submit 2 sperate Form TR1s and divide my sole trader business into two, for example 1=Gardening 2=Handyman (these are just examples) then I could keep my income in each under 3174

However, the question is that 3174 figure per trade, or per taxpayer?
 
ok, thanks

My main worry now is what completing a Form TR1 could mean for my Social Welfare entitlements in say 2 years time.

An S class contribution I fear is bad news.

Its wasting my money in the short term, because an A class is already being paid by my employer. and in the long term I fear then IF I went to claim Job Seekers Benefit the Dept Social Welfare would choose to only see the S class contributions and deny payment OR they would see both but would label me as "self employed" which somehow would work against me.

I asked in my local SW office but they didn't know (BTW the mood and queues in there are fairly bad now) I phoned some SW office in the provinces and got talking to someone with the most monotone voice ever, who spoke like they were in a courtroom, who couldn't say yes or no, who could only read from a script of keywords. I assume their calls are recorded or something?
 
Presently on 3174 you pay just the 20% tax as it's through PAYE P21's, say 635 so you net 2539.

If you get 7000 on self assessment & you'd pay the 20% tax +PRSI 3%+H/Contrib 4%+I/Levy 2% say 2030 so you net 4970.

Diff 4970 to 2539 is 2431 more into your hand from self-assessment. Is it worth an extra 50 a week over the present situation for the "hassle" of doing the extra work & filing. That's the decision you need too make.

It's not an awful big deal to file the F11 BTW, it may be lengthy but there's still only a small portion of it likely to apply & you can do it all through ROS.
 
If you are both A and S then yes it will show up on SW. If you are self-employed and go to claim then regardless of whether you stay as is or go self-assessed you should still be telling them about the extra work anyway in determining any future claim.
 
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