KPW & Company

www kpwaccountants ie  “Helping business owners help themselves” Now that you have made the decision to proceed with your business there are several factors which should be considered

• 1: Assess the viability of your business
• 2: Limited Company or Sole-trader? There are many factors to consider Cost is one, but probably not the main one as administrative costs would be similar whichever option you choose

Taxation can be a major factor When there is a surplus of income over expenses (profit) there are two options for such a surplus:- Reward the owners, or re-invest in the business to help it grow If you are likely to want to build the business over time (re-investing a proportion of the profits) then a company might be your best option (due to company taxation being lower than personal taxation)

If you choose to form a Limited Company, as a Director of that company, and therefore an employee, you will pay tax on a monthly basis, based on the salary you extract from the Company If however, you choose to be a Sole -trader your tax will be calculated based on the annual profits (irrespective of the monies you extract from the business or re-invest in the business) There will be a single payment each year For some individuals, the option of remaining up to date with their tax payments is preferable and provides a certain peace of mind

Information is key You often hear the phrase “Hindsight is a wonderful thing and if I knew then what I know now I would have done things differently”

Many small businesses operate with very limited information, which in turn limits their ability to control their business and make good decisions A business owner that does not know the true costs of running the business (monthly, weekly, daily or even hourly) is more likely to make poor pricing decisions

We would recommend that any business adopt the following practices in relation to their banking records:-

• Only operate one Bank Account
• Make payments using Electronic Fund Transfers (EFT) instead of cheque payments
• Use a Visa Debit card rather than a credit card or cash payments
• Use an accounting software which is compatible with your online banking
• We provide this service to all our clients as standard practice At times running a business will feel like you are little more than a tax collector for the revenue commissioners

It will feel like that because that is the case (as it is for every other business in the country) You have to accept this and manage this situation just like you would with any other issue in your business

There is very little scope for reducing your tax responsibilities for Payroll Taxes, V A T and Relevant Construction Tax (construction Industry) however you do have to administer these taxes correctly as you are responsible for all the tax administration, collection and payment to the revenue commissioners Many small businesses fall into the trap of counting these taxes as business assets (when the money is in the bank) You need to have a clear understanding of what your costs are and how they are impacted upon by tax, and fully appreciate your income/sales price (excluding vat) The Revenue Commissioner’s role is not to question every tax return you submit That said, they do review the returns you make, and if these returns are not in line with expectations (based on market trends) this may trigger an audit or a request for clarification

At KPW & Co , we’re always happy to receive any queries, comments and suggestions you might have in relation to our services

8 + 6 = Unit D21 North City Business Park, North Road, Finglas, Dublin 11 We offer an extensive range of professional accounting, taxation and advisory services and have a broad range of experience across different sectors such as retail, construction, professionals and non-profit organizations

The current challenging economy means that trusted business advice is more crucial than ever

We have been providing professional guidance and expertise to help businesses run more efficiently since 2006 Led by Keith Whitford, F C C A, ITI, our team’s practical experience and proactive personal service is the basis on which we build long lasting client relationships and help to improve your business

Our extensive range of professional services are focused on practical benefits for your business – improving your profits, improving your cash-flow, planning and controlling your business all year round