For many contractors, setting up in a new country can be a long and challenging process. At Accounting Pro, we try and make this process as easy and efficient as possible, letting you spend more time on the things that matter more. Below are some of the frequently asked questions we receive from contractors regarding setting up a Limited company in Ireland, particularly from UK contractors looking to make the move.
Q: Can I take a loan out from my company in Ireland like I can in the UK? If so, do I have to pay this back to the company within a certain time period?
A: The Irish system is very similar to the UK’s. You can take out a directors loan throughout the year, as long as it is repaid by your company’s year-end. If there is a balance outstanding at the year end, then the company will pay tax on this. Also, similarly to the UK, you cannot just repay this on the day before the year end and take it straight back out again. It must be left in the company for at least 28 days.
Q: Can I claim accommodation and travel as expenses over a long period of time, for example, 1-2 years? If for example, my home and address are in a county outside of the county I’m working in, could my commute for the 5 day work week and my accommodation be claimed as an expense?
A: On your accommodation expenses, it is the same argument as it is in the UK – Travel vs Commuting. As this would be travel to your normal place of work, this would not be an allowable expense. The reasoning behind this is the cost of your accommodation relates to your personal circumstances, rather than being an actual expense incurred in the course of running your business. What you could do however, is claim a portion of your rent / rates as home office use. This is usually a percentage based on the number of rooms you have.
Q: Considering contractors get no paid holidays, and I will have to pay employers PRSI, is this beneficial for example, if I had an annual gross of €80,000 or above?
A: If your income level were at €80,000 or above, we would then recommend you going down the limited company route. On this solution, Employer\’s PRSI is not payable.
Q: If I don’t want to pay a high directors salary, or take money out from the company, what salary rate would you recommend I pay out?
A: Your salary level and what you feel comfortable paying out is entirely up to you, but it would be most efficient at around €55,000. You can obviously go above or below this at your own discretion, whatever amount suits you best.
Q: Is VAT paid to the government at the same rate as is charged on invoices? If so, is it possible for the other party to claim back this VAT from the government at no extra cost to them? There was a process in the UK whereby you could claim VAT at 20%, but join a fixed VAT scheme of 16%, thereby retaining 4%. Is there a similar model used in Ireland?
A: There is no flat rate VAT in Ireland. VAT is just collected and paid to the Revenue.
We hope this helps you answer some of the questions you may be wondering! If you’d like us to answer any more of your question, or would like to inquire about setting up a Limited Company with us, please don’t hesitate to contact us at [email protected] or visit our website, https://accounting-pro.ie/
Accounting Pro is Ireland’s premier contractor accounting service. We are here to help the busy contractor and company, with all your accounting and payroll needs. We are both an umbrella company and umbrella corporation and we can create your limited company. We are experts in contractor pensions, contractor health insurance, illness and sick benefit for the self-employed and contractor expenses. To learn more about what we do please review https://accounting-pro.ie/ and contact us by email: [email protected] or phone us (01) 582 5405. For the UK see Accounting-Pro UK. “Setting up a Limited Company in Ireland – FAQ’s” is an article written by Accounting-Pro Ireland for the benefit of everyone. Feel free to share it, but please give attribution on a CC BY-SA license.