How To Register for Self-Assessment
Becoming self-employed for the first time can be an exciting, challenging and anxious transition. Calculating and paying your tax liability in the first year adds to that stress. If you were a PAYE employee before, the simple pay-as-you-earn tax system handled your tax liability for you.
Now that you are self-employed, that tax responsibility rests with you. But it needn’t be a frightening prospect! To learn how to register as self-employed, get set up for self-assessment and pay your taxes, please read on.
Register as Self-Employed
If you have recently established a business, started working as a sole trader or became a landlord, congratulations. You are now self-employed! The main legal responsibility for any self-employed person in Ireland is registering with Revenue. You are obliged to do this once you begin doing business through self-employment.
Before registering for tax, you must first register the company with the Companies Registration Office to obtain a CRO number. Once you have your CRO number, you can register for tax using ROS or by completing and submitting Form TR2.
Most self-employed people must register for Value Added Tax, with some exceptions. You must register for VAT if your annual expected turnover exceeds:
• €75,000 in the supply of goods
The Self-Assessment Tax System
Self-employed people must complete an annual self-assessment to calculate and pay tax, and file an annual tax return. If you receive income from sources where some of the tax is not collected through PAYE, self-assessment is also required.
• Investment incomes
• Foreign income or pensions
• Maintenance payments made to separated persons or from dissolved civil partnerships
• Fees and other income not subject to PAYE
• Profits earned by exercising share options or incentives
Self-employed people should maintain records of all purchases and sales of goods and services. This includes all amounts received and all amounts paid out. Recently self-employed people must submit their tax return by the second year of self-employment, by October 31st.
Register for Self-Assessment
PRSI sign-up is automatic when you register for self-assessment tax as a self-employed person. Most self-employed people will pay Class S PRSI contributions. This entitles you to a limited range of social insurance payments, including:
• Widower’s or surviving civil partner’s contributory pension
• Guardian’s payment (contributory)
• State pension (contributory)
• Maternity benefit
• Adoptive benefit
There are additional tax benefits available to self-employed people, such as the Earned Income Tax Credit worth €1,350. There are also additional requirements for people who must complete self-assessment. These include guidelines for keeping documentation and noting important deadlines.
It’s worth doing your homework to ensure you have registered your information correctly. It is necessary to keep your documentation in order. You must also be aware of the rules and requirements of self-employment tax liability and self-assessment tax returns.
Recently self-employed and need advice?
Tax Return Plus can take care of filing your tax returns, providing expert help and assistance throughout the process. We have over 25 years of experience in self-employment tax, and our service is affordable, private and confidential. This gives you the peace of mind to focus on what really matters to you in your business. Fill out our simple form to get a quote or contact one of our tax return experts today.