Setting up as a self-employed sole trader is the simplest and quickest way to start a business. There isn’t too much paperwork to do and there are no registration fees to pay. But, you must remember to register with the Revenue Commissioners for tax and PRSI purposes.

To set up as a sole trader in Ireland, you will need to live and have a PPS number in Ireland.

Here, we answer the most common questions about setting up as a sole trader.

Should I Be A Sole Trader Or Limited Company?

This decision is entirely up to you. There are pros and cons to both and you need to decide which one will suit your business the best.

Setting up as a sole trader is relatively straightforward and is the quickest option when forming a business. However, becoming a sole trader can mean that you will miss out on the benefits of incorporating a company. The most popular perk to incorporating is the 12.5% Corporation Tax rate.

What Do I Need To Do About Taxes?

As a self-employed person, you are required to self-asses your taxes and complete a Form 11.

  • Your tax returns are due before the 31st of October each year.
  • You, or an accountant, will have to assess the amount of Income Tax, Universal Social Charge (USC), Pay Related Social Insurance (PRSI) and Capital Gains Tax (CGT) you should pay in a year.

What Will I Need To Submit My Tax Returns?

  • Bank Statements
  • Records
  • Invoices

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Sole Trader vs Limited Company

Not sure what structure will suit your business? Our guide will go through the pros and cons of a sole trader business and a limited company to help you decide.

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Preliminary Tax

Sole Traders must pay preliminary tax at the end of their tax year. Our guide will help you understand and calculate your preliminary tax.

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Sole Trader Checklist

To help you set up as a Sole Trader, we’ve put together a handy checklist of personal requirements, business activities and actionable tasks to meet all legal requirements.

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Why Should I Switch From A Sole Trader To A Limited Company?

Contractor

  • If you are a contractor you may have employers, or potential employers, who will only work with limited companies.

The Business Is Growing

  • You might be growing and do not want to take any more risks. As a Sole Trader, any risk is a personal risk whereas as a Limited Company you are not personally liable as the company is a separate legal entity.

Support and Funding

  • Some organisations insist that you are a limited company to receive funding.

Protection of Company Name

  • As a limited company, your Company Name cannot be duplicated.

What Is The Difference Between A Company Name And A Business Name?

Business Name

Sole traders can use a business name. You will need to register a business name if you wish to trade under a name that is different from your true name.

Company Name

A company name is for a limited company and not sole traders. The company name creates a separate legal entity to those who own it.

Any individual, partnership or corporate body can register a business name. A sole trader can use a business name on their shop front and marketing activities.
This is one of the main differences between setting up as a sole trader versus a limited company.

For Example

Blue and Pink Baby Creations Limited trading as (t/a) Baby Store. The company will then put Baby Store on their shop front and marketing. Blue and Pink Baby Creations Ltd t/a Baby Store will be used on official company documents such as invoices and contracts.

If You're Operating As A Sole Trader Make Sure You...

  • Keep good books and records.
  • Use Revenue's Online Service as a Self-Employed Person.
  • Register for VAT and tax.
  • Self assess your taxes before the October 31st deadline.

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