For self-employed workers, it is important to ensure keeping up – to – date with any tax changes coming into the new year. There are a number of important tax updates in 2018 that will impact self – employed workers. If you are thinking about registering as a self-employed business, want to know how to do it or just want to be better aware of the 2018 tax updates, here’s our handy guide with everything you need to know as a self-employed worker.
Every new year brings with it some new changes to tax legislation. Last year, Finance Minister Paschal Donohoe announced the Budget for 2018. One of the biggest surprises of the Budget was the unexpected gains for the self-employed. As a result, you may be thinking that there’s never been a better time to become self-employed. If so, here’s what you need to do to start your own business rather than working for an employer.
Step 1: Register a business name
The easiest thing to do is start out as a sole trader by using your own name or a fancier business name if you prefer. You’ll have to register it, before receiving your Certificate of Business Name.
Step 2: Open a business bank account
Use your new Certificate of Business Name to open a business account with your bank. It shouldn’t be hard and it will help you keep your business income separate from your personal income.
Step 3: Register for tax
Next, you’ll need to register for income tax with Revenue as a self-employed sole trader using their handy online service and then register for VAT if your annual turnover is likely to exceed €37,500 in respect of the supply of services. If you are taking on employees, you will have to register for this also.
Step 4: Start keeping records
Get used to keeping receipts of everything related to your business as well as proper records of your income, expenses, VAT and even what you worked on, for who and when.
Step 5: Seek help from professionals
Consider consulting experts to help you with your affairs as you must self-assess when filing your annual tax return. This assessment must be filed on or before the 31st of October in the year after the year to which the tax return relates.
2018 Tax Updates for the self-employed
The biggest take away from the 2018 Budget is that the self-employed will pay €200 less a year in tax, as the Government extended the earned-income tax credit to €1,150. This credit will only apply to what is known as “earned income” rather than any income you may earn from rentals or investments. While it is still not in line with the level enjoyed by PAYE workers at €1,650, it is up for the second year in a row for self-employed people making tax returns.
Get help, not overwhelmed.
Becoming self-employed is an opportunity for a brave next step in your career, however it should not be undertaken on a whim. While the above may look complicated, the team at Tax Return Plus can help take the stress out of filing your taxes accurately and on time.
A standard tax return with us starts from just €185. Get a quote today or contact our expert team to ensure you pay the taxes you owe and no more.