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New year, new start

One of the most remarkable aspects of 2020 was how coronavirus failed to dampen the Irish entrepreneurial spirit. While new company registrations fell sharply after the virus was declared a pandemic in March, by the third quarter of the year the numbers were slightly higher than in 2019.

Assuming this trend continues into 2021, thousands of new businesses will emerge, blinking into the low winter sun this month. Getting the basics right will give them the very best chance of success.

Seeking company?

First-time entrepreneurs might not give much thought to the legal and financial structure of their new venture, but this is an important decision. Most will either opt for sole trader status or set up a private limited company.

The attraction of a limited company is that shareholders (who may just be the owner) are only liable for their investment in the business. The company is obliged to file an annual return even if it is not trading.

Most new enterprises are set up on a sole trader basis because it is the fastest and cheapest way of getting up and running. However, if the business grows rapidly and/or has intellectual property it wants to protect, switching to limited company status as soon as possible is probably the best option.

Tax demands

Once you have your company number from the Companies Registration Office you can register your new business for tax. This is an absolutely critical step that can be undertaken either by the founder of the business or their tax agent.

There are tax advantages to limited company status, most notably that differentiating between dividend and salary for tax purposes means the company owner saves on paying social security payments on dividends and lowers them on salary, reducing their overall tax bill.

The extent to which the business uses the services of a professional accountant or tax adviser is down to the entrepreneur. It might be tempting to assume that in the era of ‘making tax digital’ there is no need to work with an accountant on a regular basis, but by making sure the business claims all the relevant allowances and credits an accountant can significantly reduce the amount of tax the business pays.

Keep it local

Even companies with aspirations of international success will benefit from dealing with service providers close to home. There are obvious practical reasons for this (such as logistics) but using services from other Irish companies also means dealing with people who understand the market the business is operating in.

Using an accounting system that has been developed specifically in response to the needs of Irish companies and is supported in Ireland by local staff with detailed knowledge of our tax regime means working with a partner that understands the environment the business is operating in and can come up with appropriate solutions.

It also makes sense to use a cloud-based accounting solution such as Big Red Cloud. With working from home set to be the norm for some time to come, businesses need to be able to access their accounts at any time from any location.

Marc O'Dwyer

After completing a Graduate program in Marketing, Marc’s impressive sales career began at Allied Irish Banks, Pitney Bowes and Panasonic where he received numerous Irish and European sales performance awards and consistently exceeded targets and expectations. In 1992, Marc’s entrepreneurial spirit led him to set up his own business, Irish International Sales (IIS). Initially, this company was a reseller for Take 5 Accounts and Payroll software. Within four years, IIS became the largest reseller of Take 5 in Ireland, acquiring four other Take 5 resellers. He also found time to set up two mobile phone shops under the Cellular World brand and a web design company offering website design services for small businesses. In 2001, he bought the majority share in a small Irish software business, Big Red Book. At that time, the company was losing money. The company became profitable within two months, and Marc then acquired a payroll company to compliment Big Red Books Accounting products. In 2003, IIS were appointed as Channel Partners with SAP for their new SME product, SAP Business One. Marc sold his Take 5 business and concentrated on developing this new market for SAP As a result, by 2007, IIS was recognised as the largest Channel Partner for SAP in EMEA (Europe Middle East and Africa). In 2008, the IIS Sales Manager bought the Company from Marc in an MBO. He launched Big red cloud in June 2012, the online version of big red book, to date the company successfully converts 59% of trials into sales and the number of customers is growing rapidly. Marc continues to run both Big Red Book and Big Red Cloud which now support 75,000 businesses. He is a very keen sportsman, having played rugby for 20 years, represented Leinster at under 16 and under 20 levels, and league squash with Fitzwilliam Lawn Tennis Club for 10 years. Marc has competed in 11 Marathons, including the London and Boston Marathons, and has completed several Triathlons and Half Ironman races. He has also completed six Ironman Races in Austria(x2), Frankfurt (Germany), Nice (France) , Mallorca (Spain) and Copenhagen (Denmark)

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