Tax Write Off’s for Contractors and Small Business Owners

Our esteemed friends working in the Revenue want you to pay them as much taxes as possible. Typically, we save our IT and Engineering Contract clients at least €100,000 in taxes over 20 years.

Our esteemed friends working in the Revenue want you to pay them as much taxes as possible. Typically, we save our IT and Engineering Contract clients at least €100,000 in taxes over 20 years. Infinity Financial Planning try to help contractors, directors and employees to get better organised financially. Our aim is to help you minimise your taxes and increase your bank balance.
Most people are busy working long hours. Successful people use financial planners like ourselves to help identify ways to legitimately make the most of what you earn. From our 35+ years in Financial Planning we have picked a few tricks along the way which we would like to share with you:

Small Gift Exemption and Other Perks

Let’s start with possibly the best perk. A €500 single voucher may be provided, to any employee or employer, without applying PAYE, PRSI and USC to that benefit. This is called the small gift exemption. It is allowed annually.

The small gift exemption is available to employees, contractors and company directors alike.

Below is the following additional examples of how you can pay yourself:

  1. Salary
  2. Professional memberships, journals and books
  3. Mileage Allowance, at Revenue Rates
  4. Subsistence Expenses, again at Revenue rates
  5. Further Education, if improving required skills
  6. Retirement plan contributions
  7. Bonuses and Benefits such as paternity leave, and maternity leave
  8. Employee Benefits such as income protection and death in service
  9. Foreign travel expenses, if you spent all of your time abroad on business!
  10. Small gift exemption

Tax Write Offs for Contractors and Directors of Limited Companies

So now that we’ve covered the good parts about how you can pay yourself best let’s look at the legitimate ways to minimise your personal and corporate taxes. Start-up costs vary in amounts and are likely to include items such as:

  • Advertising, utilities, office supplies, and any other business-related purchases.
  • Office rent is an obvious deductible expense.
  • Home office space is deductible by the square foot in proportion to liabilities, with certain limits, which need to be discussed with your friendly accountant.
  • Printers, copiers, paper, desks, software and filing cabinets are examples of hardware as business expenses.
  • Internet, email services, website hosting, software programs, postage, stationery are some more of the the obvious ones.
  • Food, coffee and kitchen maintenance items can all be claimed reasonably.

If time-sheets and expense receipts were important when you were an employee, then they are vitally important if you are a contractor, for either an umbrella company or even personal limited company.

Umbrella Companies

By the way, an umbrella company is a ready-made Limited Company that is owned and managed by an accountancy firm. The Umbrella Company acts as an intermediary between the contractor and their employer. Your umbrella company provider needs to keep your tax compliant.

The next most important job is to submit invoice’s on your behalf to your place of employment. How quickly payments are made to your personal bank account from said company account is a good barometer of the quality of service you will receive. How long you intend on being a contractor will dictate if you are going to be a PAYE employee of the umbrella company or a director of this ready-to-go limited business.

Professional Services Roles in Medical, IT, Financial and Engineering Industries

Most people we deal with are looking for assistance in implementng some or all of the 10 ways to maximise your personal wealth above. We don’t just look after money, we look after people we deal with as if the money was our own. If you are busy with life, and struggling to figure out the best options for you, just let us know. Our job is to help you get financially organised, minimising your tax liabilities and maximising your wealth.

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Written by Pat Leahy, Certified Financial Planner

Published 2020-01-08

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