Sole Trader - VAT benefits etc

S

sabrina

Registered User
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I am a sole trader with no employees. Can some one list the benefits eg: VAT, other expenses etc that i can claim back. i am completely new to all this so any info would be a great help
 
You can only claim VAT back if you are VAT registered in business generally. When you are VAT registered you charge VAT on your sales (outputs) and reclaim VAT on your purchases (inputs) and they should balance each other out. To this end if you are a small trader it makes no sense to be VAT registered other than for cash flow purposes which are at best short term anyway. If you have a turnover above a certain level you have to VAT register, these levels are:

€55,000 in respect of the supply of goods
€27,500 in respect of the supply of services

You can find details in the 'for Businesses' section of the www.revenue.ie website.
 
Thanks for that. I am VAT registered. I only started as a sole trader in july so i wont make the lower earnings bracket. Can i still claim back VAT on % of utilitiy bills (as i work from home), VAT on tolls, VAT on diesel etc
 
Apparently if you are a Limited company it works out better than sole trader. You'll need somebody else to go along with you. If anybody knows about it a bit more, could please explain how this works out better?
Thanks
 
If you charge Vat you can claim back the Vat you pay on things that are expenses related to what you have to do to make the business work, you must keep receipts & fill Vat3 reports with revenue every two months.

Not everything you buy has Vat on it and Vat rates can vary (13.5, 21% etc).


My advice is if your below the Vat threshold only register for Vat if your a businesses to business seller. Cause a business can claim the Vat back and usually prefer to do business with Vat registered traders as anyone earning below the Vat rate may not have as much business experience. But if your dealing directly with customers the Vat comes out of your profit.
 
sabrina said:
Thanks for that. I am VAT registered. I only started as a sole trader in july so i wont make the lower earnings bracket. Can i still claim back VAT on % of utilitiy bills (as i work from home), VAT on tolls, VAT on diesel etc
Click to expand...
 
Be careful of claiming VAT/expenses back on any utility bills relating to the home. You can charge a percentage for these if you want - but if in the future you decide to sell the house then your PPR relief would also be reduced accordingly by the same percentage. You would then be liable for CGT on any profits made on selling.
 

Not sure if this is correct. I know you should not pay all bills, particularly mortgage, but I think a small percentage is ok. I don't think there is a sliding scale....as long as expenses were business related there is no CGT on PPR.
 
What is acceptable to claim as business expense and how much (%age)

1. To not incur CGT on PPR
and
2. To keep revenue "sweet" in terms of not thinking the claim is excessive?
 
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