Legal, tax and business setup
• Business status:
Operate as a sole trader; you are independent and not an employee or agent
• Registration thresholds:
Option 1 – If your profit is less than €5,000, you don’t need to have a company, nor do a self-assessment. You need to keep your records for yourself (invoices and expenses) and declare profit-income via Form 12 at year’s end, and that’s it.
Option 2 – If your profit is greater than €5,000 or your gross income exceeds €30,000, you need to do a self-assessment.
See the link to the Revenue here
• VAT:
It is only for registered companies. Do not charge VAT unless you reach the VAT registration thresholds or voluntarily register; treat any payments received as your own income. VAT is if you have a company. Not every company charges VAT. There is a threshold for that. Under €42,500, you don’t have to do anything. But in services over €42,500 or €85,000 in services and goods combined, you need to register for VAT. See the link to the Revenue here
• Insurance:
For companies. Maintain your own public liability insurance (minimum €1,000,000) and any other appropriate cover (professional indemnity, product liability).
Financial record‑keeping and bookkeeping (minimum practical setup)
- Basic books:
Keep a detailed income log, client receipts, purchase invoices, bank transaction record and petty cash log. - Separate finances:
Use a separate bank account for business income/expenses where possible. - Simplified records:
For low-earning sole traders, a spreadsheet with columns for date, client, service, gross income, expense type, and amount, and receipt ref is sufficient. - Retain documents:
Keep records for at least 6 years. - Tax filing:
Save year-to-date totals monthly and export yearly summary to help complete Form 12.