PAYE and Contract earnings

M

mpob

Registered User
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i am a full time PAYE employee but recently have been offered some extra freelance contract work. what is the procedure for setting myself up re. tax for same.
 
Hi Mpob,

Assuming you will be a sole trader you will need to complete a form TR1 [broken link removed] and submit same to your local tax district.

I would also advise that you will need to keep proper books and records of expenses and sales in order to put accurate figures together to prepare and file an Income Tax Return. As you will only be a sole trader I would suggest that you would only need to engage a registered tax advisor who is an Associate member of the Irish Taxation Institute to prepare and file your Income Tax Return. The date that your first set of accounts is prepared to is critical in determing your tax liabilities and there are special tax rules to be considered in the first 3 years of trading which play a big part in calculating your tax liabilities for each year so if you have any more questions just visit my profile and email me through my homepage.

Regards,

Mark



mpob said:
i am a full time PAYE employee but recently have been offered some extra freelance contract work. what is the procedure for setting myself up re. tax for same.
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Mark_Mc said:
As you will only be a sole trader I would suggest that you would only need to engage a registered tax advisor who is an Associate member of the Irish Taxation Institute to prepare and file your Income Tax Return.
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Codswallop.

Do you happen to be "a registered tax advisor who is an Associate member of the Irish Taxation Institute", by any chance?
 
Mark_Mc said:
Sorry, but I don't see what text you have highlighted to be codswallop? Is it the text you have extracted from the bigger paragraph above that you think is codswallop?

I don't understand why you think it is codswallop and anyone can visit my profile for more information without having to ask me.
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It is codswallop to suggest that sole traders "need to engage a registered tax advisor who is an Associate member of the Irish Taxation Institute to prepare and file your Income Tax Return". It is well-known that sole traders are free to use a variety of differently-qualified and regulated (or indeed unqualified and unregulated) accountants as well as registered tax advisors for such tasks.

To pretend otherwise appears frankly to be disingenuous and perhaps self-serving on your part, given that the website linked in your AAM profile indicates that you are "a registered tax advisor who is an Associate member of the Irish Taxation Institute"
 
Yeah, I took a look at that thread and could see that people were having a go at that guy. they were being very aggressive. It's terrible. they are having a go a one person in here too.

Who do you think is being aggressive advisor? What do you mean by "CSI" (apart from the programme) work BTW? What work did you do?


advisor said:
I have done the "CSI" work on this and most definatley think there is a link here. Didn't take long for agressive style to reappear!!!!!
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God, the language here is very aggressive. I mean Mark_Mc said that the contractor only needed to speak with a tax advisor. Perhaps he was saying this from the point of view that most people would automatically go or be told to go for the more expensive accountants? Afterall, most people think accountant in relation to tax. Or was he just highlighting his own profession in the same way that many people make mention of accountants on boards?

ubiquitous said:
Codswallop.

Do you happen to be "a registered tax advisor who is an Associate member of the Irish Taxation Institute", by any chance?
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For what its worth, registered tax advisors generally charge higher fees than non-specialist general practice accountants.
 
Hi,

Reading between the lines of what is said below your saying that registered tax advisors specialise in tax law so will probably be better able to deal with these types of issues than accountants? The reason I am asking is that I have a similar problem to deal with so I want to make sure I engage an advisor who can best deal with it.

ubiquitous said:
For what its worth, registered tax advisors generally charge higher fees than non-specialist general practice accountants.
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The MOB said:
I am only looking for constructive views so if you don't have any do you know anyone who can advise me?
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The MOB said:
The reason I am asking is that I have a similar problem to deal with so I want to make sure I engage an advisor who can best deal with it.
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If you mean you have a similar problem to the OP in setting up then Mark_Mc's original post gave the nuts & bolts of it re registration and records quite succinctly.

The MOB said:
I mean Mark_Mc said that the contractor only needed to speak with a tax advisor.
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That's not quite what was said. What he said was "As you will only be a sole trader I would suggest that you would only need to engage a registered tax advisor who is an Associate member of the Irish Taxation Institute to prepare and file your Income Tax Return."

That statement might have appeared to exclude any other person ( such as accountants in general practice) equally competent to handle the OP's business should they choose not to do it all themselves.

There is a difference between qualified tax advisors and qualified accountants. One may be either or indeed both. As an accountant in practice and registered auditor I would have a broad knowledge of tax issues but when it comes to difficult, contentious or unusual items I would sometimes engage the services of tax consultants. On the other side, a tax consultant (unless otherwise qualified as a registered auditor) cannot conduct the audits of limited companies. They may, of course as may anyone (qualified or not) prepare the accounts for sole-traders.

You need to see what work it is you require, explain that to whoever it is you propose to engage and make sure it is within their qualifications and experience to give you the proper service. I hope this clarifies things for you.
 
I think it's also worth pointing out that one does not necessarily need to engage any sort of advisor merely to register as a sole trader and file a tax return. As OP is, by his/her own admission, starting from scratch, it may be advisable to do so, but it is in no way necessary or required to have specialist advice in order to operate as a sole trader.

Sprite
 
WaterSprite said:
I think it's also worth pointing out that one does not necessarily need to engage any sort of advisor merely to register as a sole trader and file a tax return. As OP is, by his/her own admission, starting from scratch, it may be advisable to do so, but it is in no way necessary or required to have specialist advice in order to operate as a sole trader.

Sprite
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Quite correct. The taxpayer bears ultimate responsibility for their returns. If they feel competent enough to prepare & submit their own returns/accounts then they are quite entitled to do so.
 
If the consultancy work is such that there are no costs involved in carrying it out and it is for small amounts of money and not particularly regular you might be able to put it on the PAYE return under "other income". I do this with some small pieces of work I do unrelated to my job and it doesn't cause a problem.
 
Hi Graham07,

And what are these special tax rules that he refers to? Do they positively or adversly affect the taxpayer or can it be one way or the other? Do you know how these rules work? If so can you explain them to me?

Mark_Mc said:
The date that your first set of accounts is prepared to is critical in determing your tax liabilities and there are special tax rules to be considered in the first 3 years of trading .
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And how would the rules affect the amount of money I would have to pay to revenue on any profit I make? Can I use these rules to my advantage even?

Mark_Mc said:
which play a big part in calculating your tax liabilities for each year so if you have any more questions just visit my profile and email me through my homepage
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The MOB said:
And what are these special tax rules that he refers to? Do they positively or adversly affect the taxpayer or can it be one way or the other? Do you know how these rules work? If so can you explain them to me?

And how would the rules affect the amount of money I would have to pay to revenue on any profit I make? Can I use these rules to my advantage even?
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The rules referred to are the "Commencement Rules" under self-assessment. For the official blurb see Section 66 of the Taxes Consolidation Act 1997. Revenue have a good guide on self-assesment on their website called "A Guide to self-assessment". Maybe have a read through that first as any detailed run through on the rules would be a bit time consuming here. However part relates to the timing of tax payments, which if done properly, can give the taxpayer a reasonable break at the start of the business' operations. ( There are a few other threads on this sort of issue on AAM also already so a search there might help too )

A taxpayer is always entitled, is in fact expected, to operate within the tax law to the extent that they pay no more nor less tax than is fairly due. So it's always important to be up to speed on tax as affects you. Of course, you could leave that job to your tax advisor or accountant to do what's best for you if you engage one.
 
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