March 20 - Questions & Answers

Introduction

Each month we’ll take 5 questions our audience have and write an article. This month’s 5 questions are:

  1. How much does it cost to setup a limited company in Ireland?

  2. What are the pros and cons of setting up a limited company in Ireland?

  3. What are allowable expenses while being self-employed in Ireland?

  4. Can you be employed and self-employed at the same time in Ireland?

  5. How do I unregister as being self-employed?

How much does it cost to setup a limited company in Ireland?​

If you set the company up yourself the total cost is €50. It’s not as difficult as you think to setup your own company. The CRO has streamlined the process by removing the articles and memorandum of association. They have replaced this with a company constitution for which they provide a template. 

If you hire someone they will charge between €200 €300 plus VAT. You may get it for cheaper so do ask around if you are on a tight budget. If you do hire someone make sure they have the relevant experience and ask for at least 2 references from people who have purchased a similar service.

What are the pros and cons of setting up a limited company in Ireland?

Pros

  1. More funds available to reinvest as taxes are lower 12.5% v 20-40% as a sole trader
  2. Greater access to funds as you can have shareholders. Also, some grants require you to have a limited company
  3. You can only lose what you invest, you are not personally liable for the debts of the company
  4. Some employers only deal with companies eg hiring IT contractors
  5. You can expense your salary

Cons

  1. Higher cost to setup
  2. Running costs are higher as you will pay higher accounting fees
  3. You have increased filing obligations
  4. You will be fined if you do not complete your filing on time and will lose your audit exemption.
We have a more detailed article and video on the topic here: “Sole Trader or a Limited Company in Ireland – What is the best option?

What allowable expenses exist for the self-employed in Ireland?

In general any expense arising during the normal course of business can be expensed. If you have incurred a cost which can be linked to your business you can offset that expense against your income. Some expenses which are often overlooked if you are working from home include: rent, electricity, heating and internet. 

Generally, if costs are mixed, i.e. arising from both private and business use you can apportion those costs to your business. That apportionment must be reasonable. 

Can you be employed and self-employed at the same time in Ireland?

You can be both employed through the PAYE system and self employed. You simply register as being self-employed and when completing your tax return you simply state your PAYE income.

 

What is also very useful is you can offset any business expenses against your PAYE income. So if you are in the early stages of a startup make sure you register as being self-employed first before you start selling as you can offset your startup costs against your PAYE income.

 

How do I unregister as self-employed in Ireland?

You can ideally do this through ROS. After you login, scroll down to “Other services” and click “Manage Tax Registrations”. From here you click on “Income Tax”. Make sure you deregister for other services if applicable such as VAT and as being an Employer. 

If you don’t have ROS you can deregister by completing a TRCN1.

Also, if you’ve registered a business name you’ll need to notify the CRO you have ceased trading and deregister the business name.

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