A sole trader or sole proprietorship is registered in the name of the person who owns the entity and serves as the most straightforward and easy-to-understand business type of business in Ireland. This form of business has turned out to be well-liked and very prevalent, owing to an increasing number of people who are fascinated by the idea of being their own bosses instead of being an employee in someone else’s entity. The sole proprietorship has no legal separation from the owner.
Registering as a sole trader in Ireland
Registration of this type of business is moderately uncomplicated. The applicant for the sole proprietorship can either register the entity using his or her name or by means of a unique entity name. If you select the business/entity name route, then you must register the name with the Companies Registration Office (CRO). After successfully completing the registration procedure, you will procure a Certificate of Business Name. The law in Ireland stipulates that it is mandatory for every new business in Ireland to open a new bank account. This is also prerequisite for the entity’s certification. After successfully completing all the steps, the applicant will be issued the Certificate of Business Name as proof for successful registration.
Which taxes apply for sole traders in Ireland?
It is obligatory for every sole trader to undergo tax registration with the Office of the Revenue Commissioners in Ireland. The tax charged to the sole trader is determined using a self-assessment system. According to this system, the entity should pay the Preliminary Tax, no later than the first of October.
Every single Irish business using this format is obliged to keep their records up to date and to sustain indisputable records in regards to all services or goods put for sale or bought and the total amount of money attained or used for payments. Sole traders are generally not entitled to pay for VAT, however, if the turnover per year in regards to goods or products is greater than €75,000 or if the revenue each year in regards to services is greater than €37,500, they will have to pay for VAT.
Irish sole traders are also obliged to register for Pay Related Social Insurance, popularly known as PRSI. These types of businesses are classified under Class S PRSI, which represents the limited tax of social contributions. As a general rule, it is pertinent to realize that the PRSI payments are to be made at the rate of 4% on each annual income. However, in cases where the income is below €5,000, the business is can be exempted from payments pertaining to social contributions.
Wrap Up...
Individuals considering to register as sole traders in any Irish location can visit or contact our well-informed consultants at SIGTAX to arrange for further details to be availed to you. Our attorneys are fully equipped with the requisite knowledge and insightful details you should know about tax policies as described under self-employment system. Don’t hesitate to contact us anytime.
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