Bookkeeping Advice from SR Accounting - read part one

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Category: Business and Enterprise in Wexford

Published on Thursday, 22 October 2009 18:05

Written by Administrator

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STARTING IN BUSINESS – CONGRATULATIONS

Starting and running your own business requires commitment, long working hours, financial risks and a change to your current lifestyle.  Some of the traits found among successful entrepreneurs are persistence, desire for immediate feedback, inquisitiveness and a strong drive to achieve.  A high energy level and goal oriented behaviour are a must, as is vision, creativity and competitiveness.  With, of course, lots of luck!

Having set-up and run a successful business prior to my current bookkeeping and payroll business, I am delighted to have this opportunity to share my knowledge with you first hand, in hopefully a user friendly and informative format!

There are four legal structures that you can adopt for your business:

1)Sole Trader
2)Partnership
3)Limited Liability Company
4)Co-Operative

Choosing a good name for your business is often overlooked but is a very important asset to the business.  The name should be unique, easy to remember, pronounce and spell, non-offensive, informative and image creating. 

• There are some rules that you will need to check out, depending on the legal structure of your business – governed by the Companies Registration Office.  Basically you cannot use the name of an existing business or a name that will be confused with the name of an existing business.  For more information, take a look at www.cro.ie. 
• CRO state the following: Registration of a business name is obligatory if any individual or partnership (whether composed of individuals or bodies corporate or any combination of both) or any body corporate carries on business under a name other than their own true names. Its purpose is to make public the identities of those individual(s), partnerships or corporate bodies being the legal entity behind the business name.

• To register a business name, submit one of the following forms, along with the registration fee to the CRO within one month of adopting the business name:
• Form RBN1: for an individual
• Form RBN1A: for a partnership
• Form RBN1B: for a body corporate

One of the concerns people have when setting up a business is the various taxes that will have to be paid and returns that will have to be made to Revenue. Many people go from a situation of having paid tax by deduction under the PAYE system, to having to account for and pay their own tax annually. In addition they may have to account for VAT and/or PAYE/PRSI on a regular basis.  In setting up a business you are likely to ask questions such as:

How do I register for Tax?
What income do I pay tax on?
How do I meet my Pay and File obligations?
How do I deduct PAYE from my employees?
What rate is VAT charged at?
What records do I need to keep?

You are obliged to register the business with the Revenue, using a Form TR1 or Form TR2, to do this you must have a valid PPS Number.  If you were born in Ireland after 1971, you will automatically have a PPS Number, otherwise you will need to fill in a Form Reg1 which is available at any Social Welfare Office.

Form TR1: this form is for individuals, Sole Traders / Partnership / Trust / Unincorporated Body who need to register for:

• Income Tax
• Employer’s PAYE/PRSI - If you decide to employ someone you must register as an employer for PAYE/PRSI.  Note: If you set up a company, the company must register as an employer and operate PAYE/PRSI on the pay of directors even if there are no other employees
• VAT - You must register for VAT if you are a taxable person and your annual turnover exceeds or is likely to exceed the limits prescribed by law for registration. The following limits apply: £75,000 in respect of the supply of goods, £37,500 in respect of the supply of services.
• Relevant Contract Tax (as a Principle Contractor) – Relevant Contracts Tax (RCT) is a tax deduction system whereby a Principal Contractor: deducts tax at 35% from payments to subcontractors for whom he/she does not hold a relevant payments card, and maintains a record of payments to all Subcontractors regardless of whether he/she holds a relevant payments card for them.  Principal Contractors in the construction, forestry or meat processing industries must operate RCT on payments to Subcontractors.

Form TR2: this form is for limited companies (including foreign companies) who must register for Corporation Tax, Employer’s PAYE/PRSI, VAT and Relevant Contracts Tax (as a Principle Contractor) (as above).

Once registered for tax purposes you should access the Revenue On-Line Service (ROS) through Revenue’s website – www.revenue.ie.

After registering the business you may receive a “New Business Visit” from the Revenue.

Next time, we will take a further look at VAT and PAYE/PRSI.

I hope you found the above information useful.  Should you have any queries or feedback please contact me via our email This email address is being protected from spambots. You need JavaScript enabled to view it. or visit our website at www.sraccounting.ie

Sabine Rosler.


STARTING IN BUSINESS – CONGRATULATIONS

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