A guide to small business taxes in Ireland

Starting your own business is a big step. There's the excitement of going out on your own, doing something you're passionate about – but there's also a lot to figure out.

And if you're like most new business owners, tax is probably one of the things you've been worrying about.

That's completely normal. Most people aren't taught how business taxes work, and once you start looking into it, the rules and responsibilities can seem like a bit of a minefield.

It's not just about paying the right amount – it's knowing what to register for, what counts as income, what expenses you're allowed to claim and when all the deadlines are. It's a lot.

This guide is here to help you get a handle on the basics. Not in vague or complicated terms – just straightforward, practical information that tells you what you need to know and what you need to do.

Whether you're working for yourself as a sole trader, starting a small limited company or just trying to get your head around VAT and Income Tax, this is a good place to begin.

We'll cover how different business types are taxed, what your legal responsibilities are and how to stay on the right side of Revenue without driving yourself mad.

You don't need any financial background to follow it – just a willingness to understand the essentials.

1. The type of business you set up affects everything

Before you get into tax returns, VAT registration or anything else, the first thing to get clear is what kind of business you're actually running.

This matters because the way you register, the taxes you pay and the way you deal with Revenue all depend on how your business is structured.

In Ireland, most small businesses fall into one of three groups: sole traders, limited companies or partnerships.

Sole trader

This is the simplest set-up. If you're working for yourself and haven't formed a company, you're a sole trader.

That could be anything from a self-employed graphic designer or cleaner to someone selling handmade goods online.

There's no separation between you and the business – legally, it's all the same person. That means:

• you keep all the profits

• you pay income tax, PRSI and USC (explained below) on those profits

• you're personally responsible for any debts the business runs up

Setting up as a sole trader is quick. You register with Revenue, let them know you're self-employed and off you go.

No need to deal with the Companies Registration Office (CRO), no need for a company bank account – although it's often helpful to have one.

Limited company

If you've set up a company, that's a different story. A limited company is a separate legal person in the eyes of the law.

You're probably listed as a director and possibly a shareholder too, but the company itself is its own entity. That changes how tax works:

• The company pays corporation tax on its profits.

• If you take money out (as a salary or dividends), you'll pay personal tax on that income.

• You need to register the company with the CRO, file annual returns and keep company accounts.

This set-up involves more admin, but it also gives you limited liability. That means if something goes wrong, your personal assets aren't automatically on the line.

Partnership

Less common than the other two, a partnership is simply where two or more people go into business together without forming a company.

Think of two plumbers running a business as partners, or a husband and wife team running a small café.

Each partner registers as self-employed and pays tax on their share of the profits. The partnership itself also files a tax return to show the overall business position.

It's a good idea (but not legally required) to draw up a written partnership agreement, especially around how you split profits and what happens if someone leaves.

Which one should I choose?

If you're just starting out, testing an idea or working on your own, a sole trader set-up is often the most straightforward route. It's easy to manage, and you can always move to a company structure later if it makes sense.

That said, if your business involves financial risk, you're planning to take on staff or you're aiming to grow quickly, you might want to think about setting up a limited company from the start.

There's no perfect choice – it depends on your situation. The key is to understand the pros and cons before registering anything. And if you're not sure, speaking to an accountant (even just for an initial chat) is usually money well spent.

2. Getting started with tax registration

Once you've decided how to structure your business, the next step is to get properly registered for tax.

This is a must, not a nice-to-have. Revenue needs to know you're in business, even if you haven't made a cent yet.

The good news is: once you know what you need to register for, the actual process isn't too bad.

If you're a sole trader

This is the simplest route and involves the least paperwork. Here's what you need to do:

• Tell Revenue you're self-employed. You do this by registering online using a Form TR1. It asks for:

  • your personal details

  • the type of work you'll be doing

  • when you started trading

  • whether you'll be registering for other taxes (like VAT or as an employer).

• Get a PPS number. You'll need this before you register. If you're living in Ireland, you probably already have one.

• Set up Revenue Online Service (ROS). ROS is the system you'll use to file returns, make payments and manage your tax going forward. Once you've registered, Revenue will send you a log-in and a digital certificate. Don't lose it – you'll need it every time you log in.

If you're setting up a limited company

There's a bit more involved, because you're registering a new legal entity, not just yourself.

• Register the company with the Companies Registration Office (CRO). Before you do anything with Revenue, you need to set up the company through the CRO. This gives you a company number and confirms you legally exist as a business.

• Register for tax with Revenue. Once the company exists, you then register it for tax using a Form TR2. This tells Revenue that your company is trading and lets you register for things like Corporation Tax, VAT and PAYE (if you're employing staff).

• Set up ROS. Just like with a sole trader, your company will need a Revenue Online Service (ROS) account to manage tax online. But in this case, it's set up under the company's name, not your own.

Which taxes do I need to register for?

That depends on what your business does, how much you expect to earn and whether you're hiring anyone. Here's a quick overview (there's more information in section 3 below):

• Income Tax: If you're a sole trader, this is the main tax you'll pay. You must register for it as soon as you start trading.

• Corporation Tax: If you run a company, this is mandatory. Your company pays this on its profits.

• VAT: You only need to register for VAT if your sales go over a certain threshold – currently €42,500 for services and €85,000 for goods. You can register voluntarily, though, which makes sense in some cases (for example, if most of your clients are VAT-registered businesses).

• PAYE: If you're paying employees – including yourself if you're a company director taking a salary – you'll need to register for PAYE so you can deduct tax and PRSI from wages.

• Relevant Contracts Tax (RCT): Only applies in certain industries, like construction or forestry, where subcontractors are involved.

If you're not sure what applies to you, don't guess. It's worth ringing Revenue or getting advice from a tax professional before submitting any forms.

When do I need to register?

As soon as you start trading – or ideally just before. Revenue expects you to register early, and delays can cause problems later when it comes to filing returns and paying tax.

That said, you don't need to register if you're only doing very early groundwork – researching, planning or testing an idea. But the moment you start earning, invoicing or offering services to the public, it's time to register.

A quick note on naming your business

If you're a sole trader and using a business name that's different from your own full name (for example, "Westside Painting" instead of "John O'Sullivan"), you'll also need to register that name with the CRO. This doesn't create a company – it just gives you the legal right to use the name.

3. An overview of business taxes in Ireland

Once you're registered and up and running, the next thing to get your head around is what taxes your business actually needs to pay.

This will vary depending on the type of business you've set up, how much money you're making and whether you've got any staff.

A lot of people assume there's just "a tax" you pay once a year. But in reality, there are several different taxes that might apply to you – and they all have their own rules and deadlines.

Let's go through the main ones you're likely to come across.

Income Tax (for sole traders and partnerships)

If you're self-employed, this is your main tax. You don't pay it through payroll like employees do.

Instead, you work out your income at the end of the year and pay tax on the profit – that's your income after allowable costs are taken away.

You'll pay this through the self-assessment system, which also covers:

• PRSI (Pay Related Social Insurance), which goes towards your social welfare entitlements

• USC (Universal Social Charge), which applies once your income goes over certain thresholds

We'll cover how to file a return later in the guide, but for now, just know that this is your responsibility. Revenue won't chase you up – you're expected to declare and pay your tax on time each year.

Corporation Tax (for limited companies)

If your business is a limited company, it pays tax on its profits, not you personally. This is known as Corporation Tax and the standard corporate tax rate in Ireland is 12.5% for trading income.

You'll also need to:

• file a CT1 return each year

• pay preliminary tax in advance (more on that shortly)

• keep proper accounts, and possibly file audited financial statements, depending on your size

Even if the company doesn't make much money – or loses money – you still have to file a return. The company is a legal entity in its own right, so it has to report to Revenue every year, whether you're making millions or barely breaking even.

Preliminary Tax

This one catches a lot of people out, especially in their first couple of years.

Preliminary tax is basically paying next year's tax in advance, based on what you expect to owe. So when you file your return for, say, 2025, you'll also be asked to pay most or all of your expected tax for 2026 at the same time.

This applies to:

• sole traders (Income Tax)

• partnerships

• limited companies (Corporation Tax)

There are rules about how much you need to pay, and it usually has to be in before 31 October each year (or mid-November if you're using ROS).

It can be a shock if you're not expecting it, so always budget for it when planning your cash flow.

VAT

VAT (Value-Added Tax) is a sales tax. You add it to the price of the goods or services you sell, and then pass that money on to Revenue.

Not every business has to charge VAT – you only need to register once your turnover goes over a certain threshold, which is currently:

• €42,500 per year for services

• €85,000 per year for goods

You can register voluntarily if you're below those limits, and there are situations where it makes sense to do so – for example, if most of your customers are other VAT-registered businesses who can reclaim it.

Once you're registered, you'll:

• charge VAT on your sales (known as output VAT)

• reclaim VAT on your business purchases (known as input VAT)

• file a VAT return every two months, or in some cases less often

There are different VAT rates depending on what you sell, so it's worth getting advice early on if you're unsure what applies to you.

We explain VAT in more detail in section 4.

PAYE (if you're employing people)

If you hire staff – or if you're a company director taking a salary – you need to register as an employer and operate PAYE (Pay As You Earn). That means you:

• deduct income tax, PRSI and USC from wages

• send regular payroll reports to Revenue

• pay over those deductions (plus employer PRSI)

This system changed back in 2019 with something called PAYE Modernisation, which means you now report pay and deductions every time you run payroll – not just once a year.

It sounds like a lot, but if you're using payroll software (or working with an accountant), it's manageable. We explain PAYE in more detail in section 5.

Other taxes you might come across

Most small businesses won't have to deal with these, but just in case:

• Relevant Contracts Tax (RCT): Applies mainly to construction and subcontracting work.

• Capital Gains Tax (CGT): If you sell a business asset or shares and make a profit.

• Dividend Withholding Tax (DWT): If your company pays out dividends to shareholders.

What this all means in practice

Don't worry if this all seems like a lot. You won't necessarily be dealing with every one of these taxes.

A sole trader offering a service from home might only have to think about Income Tax. A small company might just be dealing with Corporation Tax and VAT.

What matters is knowing what applies to you, registering properly, and keeping good records so you're not scrambling when deadlines come around.

4. VAT – what small businesses need to know

VAT is one of those things that sounds complicated until you get used to it. At first glance, it's just a sales tax – something you add to the price of your products or services, and then pass on to Revenue.

But in practice, it can feel like a bit of a juggling act, especially when you're trying to work out if you need to register, how much to charge or what you can claim back.

So let's break it down in plain terms.

What is VAT, exactly?

VAT stands for Value-Added Tax. It's a tax on goods and services, and it's included in the price of most things you buy in Ireland – from petrol to accounting fees.

If your business is VAT-registered, you'll:

• charge VAT on the goods or services you sell

• collect that VAT from your customers

• pay that VAT over to Revenue

• reclaim the VAT you've been charged by other businesses on things you've bought for your work

You're basically a middle person between Revenue and your customers – collecting VAT on their behalf and claiming it back on your own business costs.

Do I need to register for VAT?

It depends on how much you're turning over. As a rule:

• if your annual sales are over €42,500 for services, you must register

• if your annual sales are over €85,000 for goods, you must register

This turnover is based on a rolling 12-month period – not your calendar year or tax year. So if you cross the threshold in, say, August, that's the point you're legally required to register, even if your books only close in December.

If you go over the limit and don't register, Revenue can come after the unpaid VAT – which can be painful, especially if you didn't charge it at the time.

Can I register for VAT even if I'm below the threshold?

Yes, and in some cases, it's actually a smart move. You might consider registering voluntarily if:

• most of your customers are VAT-registered businesses (because they won't care if you charge VAT – they can claim it back)

• you have a lot of VAT on your own business costs and want to reclaim it

• you want to appear more established or professional (some clients expect to see VAT on invoices)

But be aware: once you're registered, the law says you must charge VAT and file returns, even if your income drops below the threshold later on. It's a commitment.

How much VAT do I need to charge?

There are different VAT rates in Ireland, depending on what you're selling. Here are the most common ones:

• 23%: This is the standard rate and applies to most goods and services.

• 13.5%: A reduced rate used for things like hairdressing services, cleaning and maintenance services, catering and restaurant supplies, hot takeaway food and hotel lettings.

• 9%: A second reduced rate that applies to newspapers, periodicals and certain digital publications.

• 0% (zero rate): For books, certain food and drink, sanitary products and some types of medicine, clothing and footwear for children under 11 and any exports.

It's worth double-checking which rate applies to your particular trade, as getting this wrong can create trouble down the line.

You'll find clear guidance on Revenue's website, or your accountant can point you in the right direction.

Filing VAT returns

Once you're registered, you'll have to submit VAT returns regularly – usually every two months. These are called VAT3 returns and they show:

• how much VAT you collected (output VAT)

• how much VAT you paid on business expenses (input VAT)

• the difference – which is what you pay to Revenue (or reclaim, if you paid out more than you took in)

You file these returns through the Revenue Online Service (ROS). If you miss a deadline, you can be hit with interest or penalties, so it's important to stay on top of them.

Depending on the size of your business, Revenue may allow you to file every four or six months instead of every two – but they'll usually let you know if you're eligible.

Reclaiming VAT on your costs

One of the benefits of being VAT-registered is that you can claim back VAT on the things you buy for your business. That includes:

• equipment

• office supplies

• professional services

• some travel and subsistence costs (although not all)

There are some things you can't claim VAT on – like most client entertainment, or cars used for personal travel. So it's worth keeping good records and checking the rules if something feels like a grey area.

Also, make sure you keep proper VAT receipts or invoices for anything you're reclaiming. Without them, Revenue won't accept your claim.

What if I stop trading or drop below the threshold?

If you're no longer trading, or your turnover drops permanently below the VAT limit, you can cancel your VAT registration. But you need to formally notify Revenue – it doesn't happen automatically.

Keep in mind: if you claimed back VAT on certain assets (like stock or equipment) and then de-register shortly after, Revenue might ask you to repay some of it. It's always best to check before making any changes.

5. PAYE and employer's responsibilities

If you're running a business and plan to hire staff – even just one person – you'll need to register for PAYE and take on the responsibilities of being an employer.

That includes company directors who pay themselves a salary through a limited company. Once someone is on your payroll, you're responsible for deducting tax from their wages and sending it on to Revenue.

You can't just hand over money and hope for the best – there's a system, and Revenue expects you to follow it closely.

What is PAYE?

PAYE stands for Pay As You Earn. It's the system used in Ireland to collect income tax, PRSI (Pay Related Social Insurance) and USC (Universal Social Charge) from people who are employed.

As an employer, your job is to:

• work out how much tax to deduct from each employee's wages

• send that money to Revenue every month

• report the payment details to Revenue each time you pay someone

You're effectively a tax collector on Revenue's behalf – which means you need to get it right.

Who needs to register for PAYE?

You need to register as an employer if you're:

• hiring someone else to work for you – full-time, part-time, temporary or casual

• running a limited company and paying yourself a salary as a director

• employing family members (even your spouse or children)

It doesn't matter if you're only paying them a small amount or if they already have another job. If they're working for you and being paid, you need to be registered and operating PAYE.

How to register as an employer

You register for PAYE using the same TR1 or TR2 form you used to register your business – there's a section on the form where you tick that you intend to employ people.

If your circumstances change and you start employing staff later on, you can register for PAYE separately through ROS.

Once you're set up, you'll get access to Revenue's Payroll Reporting system through your ROS account.

Understanding PAYE Modernisation

Back in 2019, Revenue introduced a new real-time reporting system called PAYE Modernisation. It changed how employers report payroll information.

Before this, you'd report wages and tax deductions once a year. Now, you have to report every time you pay someone – on or before their payday.

That means every time you run payroll, you submit a report to Revenue that shows:

• gross pay

• deductions for tax, USC and PRSI

• net pay

• any employer PRSI due

This is done through payroll software that links directly to Revenue. Most businesses use software to handle this – it's not something you want to do manually.

What else am I responsible for as an employer?

Once you're employing someone, you take on a few other duties as well:

• Keep proper records of wages, hours worked and tax deductions.

• Issue payslips to your employees every time you pay them.

• Pay employer PRSI, which is a contribution you make on top of the employee's gross pay (this isn't deducted from their wages – it's your cost).

• File monthly payroll submissions to Revenue through ROS.

• Make monthly payments of PAYE, PRSI and USC to Revenue – these are due by the 23rd of the following month (if you file online).

If you miss deadlines or underpay someone, you could be fined or charged interest, so it's important to stay organised.

Hiring casual or part-time staff

Even if someone only works a few hours a week, the rules are the same. You still need to:

• register them with Revenue

• operate PAYE correctly

• file payroll submissions each time they're paid

There's no lower threshold where you're exempt. If they're on your books, Revenue wants to know.

What about contractors or freelancers?

If someone works for you but is self-employed and invoices you for their time, they're not your employee – they handle their own tax.

But be careful. Just calling someone a contractor doesn't make it so. Revenue looks at the nature of the working relationship, not the job title.

If the person is working under your direction, using your equipment, during your hours – they may actually count as an employee and you'd be expected to apply PAYE.

If you're not sure, get advice. Misclassifying someone as a contractor when they should be on payroll can lead to fines and backdated tax bills.

6. Filing tax returns – and key deadlines

Once your business is up and running, and you're registered for the taxes that apply to you, the next big job is keeping on top of your tax returns.

This is where you tell Revenue how much money you've made, what taxes are due and – in some cases – what you're owed back.

It doesn't matter if you're a sole trader or running a limited company. If you're in business, Revenue expects you to file returns and pay what's due on time. Fall behind and you could be hit with interest, penalties or even an audit.

So the key here is knowing what you need to file, when it's due and how to keep yourself organised.

If you're a sole trader

As a self-employed person, you need to file an Income Tax return every year. You do this through the self-assessment system, which means it's up to you to:

• work out how much tax you owe

• submit your return

• pay the bill

You file using something called a Form 11, which you submit through the Revenue Online Service (ROS).

If you've only just started, it can seem intimidating – but it's fairly straightforward once you've done it once or twice.

The deadline for filing your tax return and paying the bill is usually:

• 31 October for paper returns

• around mid-November (the exact date varies) if you file online through ROS

On that same date, you'll also need to:

• pay your tax bill for the previous year

• pay preliminary tax (see section 3) for the current year

Missing this deadline can result in a late filing surcharge of 5% to 10%, plus daily interest on any unpaid tax. So don't leave it until the last minute.

If you're a limited company

Companies have different tax rules and filing obligations. You'll need to:

• file a CT1 Corporation Tax return once a year

• submit annual accounts to Revenue (and also to the Companies Registration Office)

• pay preliminary tax in advance, usually one month before the year-end (but this depends on your accounting period)

You must file the CT1 within nine months of your company's accounting year-end – but no later than the 23rd day of the ninth month if you want to avoid penalties.

So for example, if your year-end is 31 December, your CT1 and payment are due by 23 September the following year.

Again, you do all of this through ROS. If your company is dormant (not trading) but still registered, you still need to file – even if it's a zero return.

If you're VAT-registered

If you've registered for VAT, you'll need to file VAT3 returns, usually every two months. These returns show:

• how much VAT you charged your customers

• how much VAT you paid on your business costs

• the difference between the two

You file online through ROS, and if you owe Revenue anything, you pay it by the 23rd of the month after the return period ends.

For example, if your VAT period is January–February, your return and payment are due by 23 March.

Some small businesses can opt for filing every four or six months, depending on their turnover. Revenue will usually let you know if you're eligible for this.

If you're operating PAYE for employees

If you have staff (or you're a director taking a salary), you need to:

• file a payroll submission each time you pay someone

• pay over the tax and PRSI to Revenue by the 23rd of the following month

So if you run payroll in June, your PAYE return and payment are due by 23 July.

You don't file a separate "end-of-year" return anymore – everything is reported in real time now under PAYE Modernisation (see section 5).

But you'll still get an annual summary from Revenue (called a "Statement of Account") so you can check everything lines up.

What happens if I file late or forget to file?

Revenue charges:

• late filing surcharges (up to 10% of the tax due)

• interest on unpaid tax (charged daily)

• penalties if you miss repeated deadlines or file incorrect returns

In more serious cases – like persistently not filing or submitting false information – Revenue can launch an audit or publish your name in the list of tax defaulters.

None of this is to scare you – just to say it's not something you want to leave until the last minute or put off.

Filing on time is much easier than dealing with the consequences of missing a deadline.

Tips for staying on top of things

• Mark the key dates in your calendar at the start of each year.

• File early – especially if you know you'll owe money.

• Keep your records up to date so you're not scrambling at tax time.

• Use accounting software if you can – it makes everything easier.

• Talk to an accountant early on, even just for advice with getting set up.

You don't need to be a tax expert – you just need to be organised. A bit of structure goes a long way.

7. Allowable business expenses and deductions

One of the more encouraging parts of running your own business is that you don't pay tax on everything you earn.

You only pay tax on your profits – and that means you can subtract the cost of running your business from your income before Revenue works out what you owe.

These are called "allowable expenses" – and knowing what you can (and can't) claim for makes a big difference when it comes time to do your tax return.

The key is this:

• The expense must be wholly and exclusively for the purposes of your trade.

• If it's something you needed to spend money on in order to do your work, there's a good chance you can claim it.

Let's look at what that includes.

Common allowable expenses

These are some of the everyday costs that most small businesses can claim:

• Office costs – stationery, phone bills, printer ink, internet charges

• Professional fees – your accountant, solicitor (for business matters) or consultant

• Marketing and advertising – website hosting, flyers, social media ads

• Travel – business-related mileage, fuel (if using a van), public transport, parking for work trips

• Training – courses, seminars or conferences that relate to your business

• Bank charges and interest – on your business account or loans

• Wages and salaries – if you employ staff

• Rent or utilities – if you rent a workspace or office

• Insurance – policies that protect your business, such as public liability or professional indemnity

As long as the cost was necessary for running your business, it's usually okay to deduct it.

What about working from home?

If you work from home – whether you're self-employed or running a small company – you can claim a portion of your household costs as business expenses. That might include:

• electricity and heating

• broadband

• rent or mortgage interest (for sole traders only)

• light and heat

• home insurance

You can't claim the full amount, though – only the share that relates to your work. There's no fixed formula, but a common approach is to divide the cost based on the number of rooms in your home, or the number of hours you use the space for business.

Example:

If you use one room in a five-room house as your office, and you're working there full time, you might claim 20% of those bills. If you're only using it part time, that percentage would drop.

It's not an exact science, but it should be reasonable and justifiable if Revenue ever asks.

Can I claim for a car or van?

Yes – but the rules are different depending on how you use the vehicle and what kind of business you're running.

• If you're a sole trader using your car for business, you can either:

  • claim a flat rate for mileage (if it's mainly personal use with occasional work trips), or

  • claim a portion of your running costs – fuel, insurance, maintenance – based on how much of your driving is for business.

• If you use the vehicle solely for business – like a van or a company car that you never use privately – you can usually claim the full running costs and depreciation.

Keep a logbook or mileage record if you're claiming mileage. If you don't, and you're ever audited, Revenue can refuse the deduction.

What can't I claim?

There are certain costs that Revenue just doesn't allow, even if they're loosely connected to your business. Here are some examples:

• Client entertainment – such as meals, drinks or golf outings. Even if it helps you win work, it's not tax-deductible.

• Fines and penalties – parking fines, late filing charges, Revenue penalties.

• Clothing – unless it's protective or branded (like hi-vis gear or overalls with your company logo).

• Personal expenses – anything that's a mix of personal and business, unless you can clearly separate the business part.

If in doubt, ask yourself, "Would I have bought this if I weren't running this business?" If the answer's no, there's a good chance it's an allowable expense.

Capital allowances – a special case

Some larger purchases – like laptops, equipment or machinery – don't go down as everyday expenses.

Instead, you claim for them gradually, over a few years. This is called a "capital allowance".

You'll usually get to write off 12.5% of the item's cost each year, for eight years, until you've claimed the full value. It's Revenue's way of spreading out the tax relief on something that's expected to last.

There are specific rules and rates depending on what the item is, so it's worth speaking to an accountant if you're claiming for anything expensive or long-term.

Keep your receipts

This one's simple: if you're claiming an expense, keep proof. That means:

• receipts

• invoices

• bank statements or credit card records

You don't have to send these to Revenue when filing your return. But if they ever ask to see them (for example, during a spot check), you need to be able to show the paperwork.

The rule is: keep records for at least six years. You don't need fancy software – a well-labelled folder, spreadsheet or even a photo log on your phone will do the job. Just make sure it's organised.

8. Record-keeping and accounting best practices

You don't need to love paperwork to run a small business – but you do need to keep your records in order.

Staying on top of your accounts doesn't just help when it's time to file a tax return. It gives you a clearer picture of how your business is actually doing.

It also saves you a lot of stress if Revenue ever decides to take a closer look at your books – which they can do, sometimes without much warning.

So whether you're just starting out or you've been going a while, good record keeping is one of those behind-the-scenes habits that quietly keeps your business running smoothly.

What records do I need to keep?

You need to keep anything that shows:

• what you earned

• what you spent

• what you owe (or are owed)

• what taxes you've collected or paid

In real terms, that usually means:

• sales invoices and receipts

• purchase invoices and receipts

• bank and credit card statements

• payroll records (if you have staff)

• VAT returns and workings (if you're VAT-registered)

• copies of your tax returns and any Revenue correspondence

If it relates to your business finances, keep it. Even if it seems unimportant now, it might be needed to back something up later.

How long do I need to keep them?

The general rule in Ireland is six years. That applies to both digital and paper records.

If Revenue audits your business, they can look back over that whole period. So make sure your records are complete, readable and easy to access – not stuffed in a shoebox in the attic.

Paper or digital – does it matter?

No – either is fine. Revenue accepts digital records, and most businesses now keep things electronically. In fact, digital is often easier to manage, back up and search through later.

You can scan receipts, store PDFs or use accounting software that pulls in transactions from your bank. The key thing is that the records are complete and clear.

If you're still using paper, that's okay too – just make sure it's well organised and not at risk of getting lost or damaged.

How to stay on top of things

You don't need to be an expert, but you do need some kind of system. The most important thing is that you stay consistent.

Here are a few habits that make a big difference:

• Keep business and personal finances separate: Set up a dedicated business bank account. It makes life so much easier at tax time – and helps avoid confusion over what's a business expense and what's not.

• Set aside time each week: Even just 30 minutes to log expenses, send invoices or upload receipts. Don't leave it until the end of the year. That's when mistakes happen and things get missed.

• Use accounting software (if it suits you): Tools like Xero, QuickBooks or BrightBooks can track your income and expenses, generate reports and even file VAT returns. They're especially helpful if you're VAT-registered or employ staff.

• Back everything up: If you're keeping digital records, make sure they're stored safely – either in the cloud or backed up on a hard drive. If something goes wrong and you lose them, Revenue won't accept "the file crashed" as an excuse.

• File things as you go: Got a receipt? File it. Sent an invoice? Save it. Don't let paperwork pile up – it becomes a chore and you'll end up guessing when it matters most.

Do I need an accountant?

Not always – but it helps. If your business is small and fairly straightforward, you might be able to handle the basics yourself.

But even then, it's worth getting an accountant to check your first return or give you advice on how to structure things properly.

It's probably time to get professional help if you're:

• VAT-registered

• employing staff

• running a limited company

• claiming complicated expenses or allowances, or

• unsure about anything

A good accountant doesn't just file your return – they can save you money, spot issues early and give you peace of mind that everything's being done properly.

9. Tax credits and reliefs available to small businesses

When you're running a small business, every euro counts – and that includes money you can save on your tax bill.

The good news is, the Irish tax system does offer a number of credits, reliefs and incentives aimed at helping small businesses, start-ups and entrepreneurs. The trick is knowing what's out there and whether you qualify.

Some of these are automatic, others you have to apply for. But if you're not looking out for them, it's easy to miss them altogether. Let's look at a few that are worth checking.

Start-up Relief for Entrepreneurs (SURE)

If you've recently left PAYE employment and used your savings or redundancy to start a company, this one's worth a look.

SURE lets you claim Income Tax relief on the money you invest in your new business – which can be a serious help in the early stages.

To qualify, you must:

• have been PAYE-employed (or recently made redundant)

• invest cash into a new limited company in return for shares

• work full-time in the business

You can potentially claim back tax paid in the previous six years, depending on how much you invest.

It's not automatic – you'll need to apply and meet the conditions – but it can be a major boost if you're eligible.

Section 486C tax relief

This is aimed at limited companies in their early years. If your company is newly incorporated and trading, you may be able to claim full or partial relief from Corporation Tax for the first three years – up to certain limits.

There are conditions:

• Your Corporation Tax bill must be under €40,000.

• The relief only applies to trading income, not investment income.

This one isn't a cash refund – it just lowers the amount of Corporation Tax you owe. But if you're just getting off the ground, that can make a real difference.

R&D Tax Credit

If your business does any kind of research and development (R&D) – and this doesn't have to mean white coats or laboratories – you might qualify for an R&D tax credit.

This gives you 25% back on qualifying R&D expenditure, on top of the normal Corporation Tax deduction.

You don't need to be a big tech firm to claim. If you're working on a product, process or service that involves some level of innovation or technical uncertainty, it's worth asking your accountant if this applies.

It's detailed and can be tricky to navigate, but the potential value is high.

Capital Gains Tax reliefs (for selling a business)

If you sell your business – or part of it – in the future, there are two main reliefs that can reduce your Capital Gains Tax (CGT) bill:

• Revised Entrepreneur Relief: Reduces the CGT rate to 10% (instead of 33%) on the first €1 million of gains, if you've owned and run the business for at least three years.

• Retirement Relief: Available if you're over 55 and selling or transferring your business, often to a family member. It can eliminate or reduce CGT, depending on your age and the value of the business.

These don't apply when you're just starting out, but it's good to know they exist down the line – especially if you're building something with long-term value.

Employment incentives and grants

There are also non-tax supports that can help small businesses, particularly around hiring and training. These include the following:

• The Employment Investment Incentive (EII) – tax relief for investors who put money into your business

• Wage subsidies or grants through your Local Enterprise Office (LEO)

• Apprenticeship or training support for new employees

These won't directly reduce your tax bill, but they can ease cash flow and the costs of growth.

A quick word of caution

Some of these reliefs come with fine print. To qualify, you often need to meet specific criteria, follow formal procedures or apply by certain deadlines. Missing a small detail can mean losing out completely.

So if you think one might apply to you, it's worth getting proper advice. Even a one-off chat with an accountant or tax adviser could save you thousands in the long run.

Final thoughts

Running a small business is hard work. There's a lot to think about – not just getting clients, delivering your service or selling your product, but also keeping the books in order and staying on the right side of Revenue.

Tax can feel like a grey area when you're starting out.

• What do you need to register for?

• What can you claim?

• What happens if you get it wrong?

The truth is, it's not as mysterious as it seems – once you break it down into the parts that apply to you.

The most important things to take away are:

• get registered properly from the start

• keep good records, even if they're basic

• understand your tax deadlines, and file on time

• only pay tax on profits, and claim for what you're entitled to

• ask for help when you need it – especially early on

You don't need to be perfect. But you do need to be aware, organised and proactive. Most tax problems don't come from bad intentions – they come from confusion, delay or silence.

So stay informed, stay consistent and treat your tax responsibilities like any other part of the business – not a separate world, just one more moving part to manage. Get it right, and you can get on with the work you actually enjoy. 

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