Person who is employed part time 2.5 days a week and self employed the other 2.5 days

[chouchou]

I have been trying to find information regarding a person who is employed part time 2.5 days a week and self employed the other 2.5 days a week. Reading the revenue.ie site it appears to be all about being either self employed of employed - any suggestions where I can get info. I am trying to figure out how the taxation would work.

Thanks

 

[Black Sheep]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

It appears you would need to register as Self-Employed if you have not already done so. Revenue have a very good leaflet called Starting in Business (IT 48) which should guide you along

 

[Graham_07]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

Black Sheep is correct. Any self-employed person, whether they have other employments or not should register with Revenue on Form [broken link removed] . The self-employment and the PAYE employment are filed together annually on Form 11 . There are guidelines on Revenue's site on the dates of payment of tax and broadly what expenses are allowable from self-employment.

The taxation basically works by taking the total income from all sources ( gross PAYE and net income from self-employment) , calculating tax on the totals, deducting tax credits, deducting tax already paid on PAYE and the balance is payable direct to Revenue. PRSI/Levies may also be payable depending on income levels.

Bear in mind that if the self-employment is a service and if income before expenses exceeds €37,500pa from the self-employment then VAT registration may be necessary (unless the activity is a VAT exempt one)

 

[chouchou]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

Thanks for replies.

Some expenses arising are not deductable expenses under the PAYE system but are deductable as a self-employed person. For example my wife needs professional indeminty insurance to practice as both an employee and self employed person. Would the expense be fully deductable or be prorata between the two types of employment.

Regard

John

 

[Graham_07]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

Thanks for replies.

Some expenses arising are not deductable expenses under the PAYE system but are deductable as a self-employed person. For example my wife needs professional indeminty insurance to practice as both an employee and self employed person. Would the expense be fully deductable or be prorata between the two types of employment.

Regard

John

If the PI Insce is mandatory for her employment then it may qualify as deductible under PAYE as "wholly,exclusively and necessarily" incurred. In that case you may get a deduction there for 1/2 and the other 1/2 under the self-employment, or otherwise pro-rata to earnings.

 

[Jim Davis]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

Your wife would need to register as self employed by filling out a TR1.

However, bear in mind that revenue may deem your wife to be a PAYE worker should they investigate. There are tests which can be laid down to determine if a person is providing services under a contract of service (employed) or a contract for service (self-employed). Some of main factors are:
Contract of service
The individual can get someone elso to do their work
They are paid sick pay holiday pay etc
They expected to work set hours per week or month
They work wholly or mainly for one business

Contract for service
Individual is entirely responsible for own time and work
Individual controls their own woek and where and when it's done
Individual is free to hire staff
Individual is not paid holiday pay of other entitlements

It sounds to me that if your wife is registering as self employed just to deduct taxable expenditure and her working conditions remain the same then she would be considered to be an employee under PAYE.

 

[Graham_07]

Re: Person who is employed part time 2.5 days a week and self employed the other 2.5

It sounds to me that if your wife is registering as self employed just to deduct taxable expenditure and her working conditions remain the same then she would be considered to be an employee under PAYE.

I see nothing in the original posts to suggest this to be the case. The PII was given as an example. There may be other relevant allowable expenditure also. The person may very well be an alternative therapist or a hair stylist who is both working on PAYE and practising from facilities at home. There are also many other such instances where it would be quite valid to claim as stated. The OP may wish to clarify by indicting what type of work his spouse is doing. If it is one which is not easily classed as a self-employment under the Revenue rules, then your comments would of course be quite correct.

Additionally if any exepnditure such as PII is mandatory to the PAYE employment then it may be allowable as a tax deduction under the "wholly, exclusively and necessarily rule".