PAYE Worker with hobby-type sideline.... taxation?

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I am a PAYE worker, and am starting up a "hoppy-type" sideline while still working a 39 hour week in my current job. I am now looking into the best way to do this, from a taxation point of view. I will continue to work full time, but would like my sideline to be accounted for, should it ever turn into something more serious down the line... Any advise would be appreciated.

Thanks!
 
If the hobby income is not above the VAT threshold or not a vatable activity, there is probally not a need to do anything until the end of the year when you will need to submit a tax return.

If the profits are rising and are greater than the amount you need to live on. Then perhaps need to review and look at the company option.
 
Good advice on the VAT point first.

Revenue may (or may not) continue to treat you as PAYE depending on how big or small the sideline is. Rule of thumb seems to be 5-10% of your main income.

You might be entitled to deduct expenses on this if you 'incur' them and they are wholly and exclusively for the job. You will need to keep records.
 
Thanks for your help! I'm still not fully understanding it all though...

What is the VAT Threshold? And what comprises a Vatable activity? (sorry, I'm very new at this!)

The expected annual income at present would amount to approximately 8% of my overall annual income, but is very subject to change, depending on demand.

In order to file a tax return, do I need to register as a business?

I don't expect the profits will rise to greater than what I need to live on for a very long time, so keeping my full time job at present is essential!
 
You don't need to register for VAT.

At end of year submit Form 11 to Revenue declaring your private income. Simple.

If you don't understand you need an accountant/tax advisor.
 
Hi,

Just emailed a similar query to the revenue.. reponse was...

"Please note that if your non-PAYE trading income, after expenses, comes to more than €3175 in a tax year then it will be subject to declaration under self-assessment, together with any other income you may have.

Based on the above, and if you need to register for Income Tax, submission of your Return of Income will advise you what liability, if any, arises.

Your PAYE earnings will continue to be dealt with separately for tax credit purposes.

For further information please refer to Revenue Guide IT 48 at the Forms and Leaflets section at our website www.revenue.ie."

Bit confused on Form 11, is payment included on this or do you pay at a leter stage. Also, what are the deadlines for this?
 
paulocon said:
Bit confused on Form 11, is payment included on this or do you pay at a leter stage. Also, what are the deadlines for this?
Click to expand...

Form 11 for 2005 will be submitted before 31 October 2006. Payment should accompany return together with preliminary tax for 2006. You will obviously have to be able to work out your own tax to make the payment and calculate PT for 2006.

I would recommend getting a tax advisor to complete your returns.
 
Hi Paul,

I just did this last week myself - I'm PAYE, but am starting to do some other work on the side.

1. Download IT48, Starting a Business, from the revenue.ie website. Read it - it's very helpful.

2. Download IT49, Guide to VAT, from the revenue.ie website and flip through it. Basically if you are providing a service or adding value in any way to an item you then sell on, VAT will be involved, so you need to know how much to charge and what to do with the VAT money. However, you don't need to register formally for VAT unless you're making over E25.5k for selling a service or E51k for selling goods per annum.

3. Download TR1 form from the revenue.ie website. Fill out section A to register yourself for income tax (and VAT, if necessary) and send it off.

4. Download last year's Form 11 (tax return) and the Guide to Form 11. Figure out what all parts of section B mean, as that's the part where you'll declare your income from your hobby (your PAYE income goes in section E). Then study all the rest of the form to find out how to claim as much relief as you can!

5. You'll need to submit your Form 11 by 31 October every year for the previous year's income. Submit it by the end of August if you want the Revenue to do the sums for you - they'll send you a tax demand and you just take it to your bank and stump up. Depending on whether VAT applies, you may need to submit VAT forms and cheques every two months - the Revenue will send you the forms themselves if the amount you think you will be making warrants it.
 
polar,

Excellent post and very much appreciated. Don't have VAT to worry about as I will fall below the limit but is something I may need to think about next year...

Once more, thanks for the excellent help and hope your work on the side goes well and you're finding the experience as exciting and rewarding as I am..
 
Similar situation - full time job PAYE etc., do a little bit of work on the side. Few questions though -

For 2006 I will probably only earn in the region of 2500 - 3000euro. Do I need to declare this and pay tax on it at the higher rate, or is it too small a sum?

Another post seems to suggest that if you earn less than 3175euro in a tax year as extra income then you don't need to declare it - is this true?

Any advice would be much appreciated
 
It would be at 42% due to my day job. But just trying to figure out if I've earned enough to declare it or not?
 
You must declare evrything the 3175 they mention is whether ypou have to go throught ht efull form of self assessment...I assumme
 
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