Start Your Business Today: Entrepreneurship and Understanding Tax

Starting a business can be a daunting experience for any entrepreneur. One aspect of starting a business which is often overlooked by entrepreneurs is the tax compliance obligations set down in Irish tax legislation.

Unlike the majority of the working population in Ireland who receive a salary through PAYE employment and have their tax deducted at source by their employers, entrepreneurs are obliged under Revenue’s self assessment system to prepare tax returns, calculate their tax and pay this tax to Revenue by certain prescribed deadlines. These tasks can be time consuming and entrepreneurs should familiarize themselves with important tax filing and payment deadlines. Revenue’s website provides detailed information on the obligations of taxpayers starting a business. It is worth nothing that failure to meet these tax filing or payment deadlines can result in significant penalties and interest payments.

One of the first steps you should take when setting up a business is to register that business with Revenue. This is done by completing a tax registration form. On this form you will provide detailed information about your business to Revenue, in addition to deciding which tax heads your business is registering for (e.g. Income Tax, Value Added Tax, Corporation Tax, PREM). If you are setting up as a sole-trader, you will complete a Form TR1 and if you are setting up an incorporated company, you will complete a Form TR2. Both of these forms are available online on Revenue’s website and can be submitted through Revenues Online Service (“ROS”). If you are not already registered for ROS, you should complete this registration at the outset of your business venture. ROS will allow you to make tax payments and file all tax returns online. There is a ROS helpdesk where taxpayers can call to ask any questions on ROS or if they are having difficulties operating this service.

There are many tax questions an entrepreneur should ask themselves when setting up a business. If possible, it would be prudent to seek tax advice to ensure that all tax compliance obligations are being met. For example, one question that should be considered is whether the taxpayer should register for VAT. If you anticipate that your business’ turnover will be in excess of EUR 75,000 (supplying goods) or EUR 37,500 (supplying services) in a twelve month period you will breach the VAT registration threshold and you will be obliged to register for VAT, submit VAT returns and make VAT payments (if applicable) to Revenue. However, some types of business are considered “VAT exempt” and therefore there is no requirement to register for VAT, regardless of the business’ turnover. There are also significant VAT administrative responsibilities on the taxpayer, such as filing informational returns such as VIES returns, which deal with when a taxpayer makes cross-border supplies of goods or services from one EU member state to another.

In conclusion, there are significant tax obligations on an entrepreneur when starting a business. Keeping good books and records (e.g. sales and purchase invoices, bank statements) will ensure that proper accounts can be prepared for the business and this will assist in correct tax returns and payments being submitted to Revenue. While paying for tax advice at the outset of a business venture may seem like a costly expense a fledgling business can not afford, it is arguably a cost worth incurring to avoid becoming liable to Revenue surcharges, interest payments and penalties for failure to comply with what are oftentimes considered complex tax obligations. Many businesses only address tax compliance concerns when something goes wrong. This is the wrong approach to take. Start-up businesses should set time aside to consider their tax obligations. Revenue’s website is a good place to start:


The Importance of Elon Musk’s Announcement today

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Today marks the day of Elon Musk’s solar glass roof tiles finally go on sale. Musk will be rolling out to major styles “black glass smooth and textured will be first. Tuscan and French Slate in about six months”. This technology has captured the imagination of the world and seeks to reconfigure how the world is powered. This disruptive technology will revolutionize how energy is collected and stored forever! This is just one of a long list of innovations Musk has introduced to the world.  I chose to take a look at the life of Elon Musk for my second last blog post as he is a huge inspiration to me. And what better day to talk about him than on the day he launches one of his most innovative products to date!

Born in South-Africa in 1971, Musk was destined for great things. Founder and CEO of SpaceX, Neuralink and Tesla, Co-founding OpenAI, PayPal and SolarCity, Musk has achieved more in the last twenty years than a thousand people could in a lifetime. As of May 2017, his net worth stands at $15.2 billion. Elon Musk is beyond inspirational, not because he taught himself computer programming at the age of 12, or dropped out of grad school or even because his official salary for Tesla Motors is just $1 a year, I am inspired by his values. I write another eight week blog on his accomplishments and accolades but I would rather take a closer look at his problem solving abilities.

In an interview in 2015, Musk expressed his respect for the “First Principles Thinking” and advocated for people to move away from “reason by analogy”. He suggests we should boil things down to their simplest form…then work from there. This critical way of thinking dates back as far as Aristotle. Musk argues it “takes a lot more mental energy”, but the results can be groundbreaking!

Musk suggests that people focus too much on their experience and fail to build their reasoning from the ground up. He suggests;

“You look at the fundamentals and construct your reasoning from that and then see if you have a conclusion that works or doesn’t work. And it may or may not be different from what people have done in the past. It’s harder to think that way, though.”

Musk seeks to establish what is fundamentally true and then works on from that point. This is how he has managed to develop solutions for some of the most complex issues of the last twenty years. Vision and adaptability are key competencies to entrepreneurship and these are possessed in great quantities by Musk. The final competency which I believe is integral to entrepreneurship is perseverance. Musk believes in long hours and hard work. He suggests

“Work like hell. I mean you just have to put in 80 to 100 hour weeks every week. [This] improves the odds of success. If other people are putting in 40 hour work weeks and you’re putting in 100 hour work weeks, then even if you’re doing the same thing you know that….you will achieve in 4 months what it takes them a year to achieve.”

While this may be hard to hear, there is undoubtedly no substitute for hard work.