Candidates

Contracting in Ireland 

Looking for contract and freelance roles in Ireland? First, you’ll need to understand how to get started.  

Setting up as a contractor 

There are three main routes you can take to becoming a contractor in Ireland. They are:  

  1. GCS (Agency) Employee 

  1. Umbrella Company (Composite Company) 

  1. Limited Company 

GCS (Agency) Employee 

You become an employee of GCS and we place you on a contract at the premises of a third party. It’s worth noting that earnings will be higher than those of direct employees, but will generally be approximately 15% lower than those of the self-employed of limited company routes.  

This is because GCS will deduct employers' Pay Related Social Insurance (PRSI) from your earning. In addition, full tax and PRSI will be deducted form earnings at source and none of the possible tax advantages of running your own business will be applicable to a GCS employee. 

Umbrella Company (Composite Company) 

The concept of the Umbrella Company (or Composite Company as it is sometimes known) has become popular in Ireland recently. An Umbrella Company is a halfway point between the agency employee and Limited Company routes.  

The Umbrella Company is set up and run by a third party. You become an employee of the Umbrella Company and all invoicing, VAT returns, tax, administration, bookkeeping etc. are handled by the Umbrella Company. You are then paid a salary related to your earnings. The concept is directed primarily at contractors on foreign assignment and some contractors use it as a first step towards having their own company. 

Individuals who are on quite a low contracting rate and/or those who are going to contract for a short period of time, may find it cost effective to use an Umbrella  Company 

Limited Company 

The most popular method of contracting in Ireland is to form your own Limited Company. 

A limited company must be set up and registered with the Companies Registration Office. It must have at least two Directors and shareholders and the cost of setting up the company is approximately €400. 

A limited company must prepare annual accounts. A summary of these audited accounts must be lodged with the Companies Registration Office. From a pension point of view the company can contribute - without restriction to a pension for a director - and can obtain a deduction from profits for this amount. 

The director is not liable to account for any income tax on these payments made on his behalf. If a director has his own motor vehicle he can claim a mileage allowance for any business miles he travels on behalf of the company. 

The mileage rate depends on the car and on the annual business miles travelled. The company can obtain a deduction from its profits for these payments and the director is not taxed on them. 

However, where mileage is claimed the director must pay his own car insurance, motor tax and petrol costs. 

A company can have any year-end it chooses and no commencement or cessation provisions apply. As a company is a separate entity from its directors, no director can be held personally liable for the debts of the company, unless a personal guarantee is given in any case. 

How to set up as a Limited Company: The most common ways of setting up a limited company are through a company registration agency or through an accountant or solicitor. The contractor may choose a company name and specify the objects of the company. The process takes about two weeks. 

Alternatively, an "off-the-shelf" company can be purchased and tailored at extra cost. 

The following forms need to be completed: 

  • Form B10 - Appointment of Director and Secretary 

  • Form B2 - Notification of Registered Office 

  • Form A1 - Issue of Shares 

  • Form TR2 - Application for registration for Corporation Tax, VAT and PAYE/PRSI. 

  • Form 12A - Application for a certificate of tax-free allowances. 

The following documents will be provided: 

  • Certificate of Incorporation: A certificate setting out where and when the company was incorporated, and its registered number 

  • Memorandum and Articles of Association: The constitution of the company setting out the reasons for which the company was formed and any restrictions on the conduct of its day- to-day business 

  • Setting up a Bank Account It is recommended that the contractor open two bank accounts in the name of the company:  A current account for the day-to-day transactions of the company.  A deposit or high-interest account which should be used to save funds for payment of VAT and tax bills. 

In order to be set up you will need to have 

  • Full Name and Address 

  • Company Name or Business Name 

  • Company Registration Number 

  • Irish VAT Registration Number 

  • Payment details: Bank account details (including IBAN and Swift Address) 

  • Contractors should be registered for VAT in Ireland if they are Irish Nationals. 

At GCS we can provide all the advice and guidance you may need. Feel free to phone Tim Dunne on 01 447 5262 and take the first step in an exciting and rewarding new career. 

 

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