Raising Capital

Recently I was discussing with one of  our clients as to whether they needed investment or not and I realised very very few of our clients started their business with outside investment. Before you go looking at raising capital I would strongly suggest looking at the following.

 

  1. Can you adjust the business model slightly to allow bring in revenue sooner, I know some IT Entrepreneurs who consulted for other businesses during the start up phase to provide working capital for their own business. This left them with no investors, no outside pressure and really incentivised them to get their product to market sooner
  2. What do you want the investment for? Sometimes business owners expect to need a lot of cash to start up, Often you don’t. For example we have assisted one of our retail clients to get 12 months rent free on premises. This reduces their need for investment.
  3. Can you get it? Before spending months on a business plan which requires investment do some research and see is investment achievable. The banks are still not lending and outside investors are few and far between in Ireland
  4. Can you work with an outside investor? By their very nature entrepeneurs like doing their own thing, Investors want a return on their investment, Nothing else.  Richard Branson floated Virgin on the stock exchange , had a few stressful years and then bought it back.

 

 

If your looking for Inspiration CraigsList was bootstrapped and showed revenue of over $100M in 2011.  Threadless was started with an investment of $1000 and is now worth $40M

It can be done!

 

 

Employer paying course or exam fee's

Refunds of course or exam fees to an employee which have been paid by the employee, or direct payments of course or exam fees by the employer, will not be treated as giving rise to a taxable benefit where the course undertaken is relevant to the business of the employer.

A course is regarded as relevant to the business of the employer where it leads to the acquisition of knowledge or skills which are –

necessary for the duties of the employment, or
directly related to increasing the effectiveness of the performance of the director’s or employee’s present or prospective duties in the office or employment.

Employers gift to employees / Christmas Bonus

Where an employer provides an employee with a small benefit (that is, a benefit with a value not exceeding €250) PAYE, PRSI and Levies need not be applied to that benefit. Only one such benefit given to an employee in a tax year will qualify for such treatment. Where a benefit exceeds €250 in value the full value of the benefit is to be subjected to PAYE, PRSI and Levies. This concession does not apply to cash payments regardless of the amount.

Tax on Spanish Rental Income

Irish residents with Spanish rental property must make two income tax returns one in Spain and one in Ireland

Tax Residency

You are considered tax resident in Ireland if you spend at least 183 days here per year or 280 days over a two year period.

As an Irish tax resident and Irish domiciled person you are liable to tax on your worldwide income and gains. Therefore, if you own and rent a property in a foreign country you are liable to Irish income tax on the rents you receive and Irish capital gains tax on the gain if you decide to sell the property.

In other words, as an Irish resident, no matter where your property is situated, if you receive rental income or you make a gain on the sale of your property – you are always assessable to tax in Ireland.

Non resident landlords in Spain pay income tax at the current rate on gross income, Unlike Ireland there is no deductions for expenses or allowable interest.

In Ireland the landlord files an income tax return as normal taking the Spanish rental income and deducting allowable expenses. We can then take a credit of the tax paid in Spain.

Losses on foreign rental income can only be carried forward against future profits, Not used against Irish income.

For further information please do not hesitate to contact us on ralph@domybooks.ie or 01-4800531