# Company Status and Clawbacks



## TAO22 (Dec 30, 2010)

Hi All

two quick questions which I hope you can help with please.

Firstly, what clawbacks can you offset against tax if you are registered as a sole trader business status? For example, house rent, office space, electricity etc..all my accountant says is...give me the receipts and I will sort it out at year end....! Clearly I would like to know what I am dealing with before I start.

secondly, I have been informed that you have to stay with a sole trader status for 3 years!!? But wonder what happens if the business grows and you need to change the status to a company or employ people?

Any info would be greatly received.

many Thanks


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## canoeman (Mar 3, 2011)

Sounds as if your initial advise has not been that good or *maybe explanatory*, when you registered as a sole trader did your accountant or Financas tell you of the options of registering for the Simplified Regime or Standard Accounting, *which* you are registered under depends *on what and how you claim* and *whether you must employ* an accountant to file possibly monthly returns.

Answer that and then I'm sure you'll get some responses

You can change "regimes" as business warrants or if you exceed Simplified Regimes max turnover currently 150,000€ but increases 2014 

"secondly, I have been informed that you have to stay with a sole trader status for 3 years!!?"
Don't think this is correct, the 3 years is an initial period to help a business establish, so in year 3 you start making stage payments on estimated tax with any corrections year end.
If you change the business to the degree of a company or employing people you then you'd need to decide on best way to register business and operate but the least onerous and costly for you would be employing people as "self employed" whether your a sole trader, company etc

Are you aware that IVA thresholds are low in Portugal? turnover +10,000€ you must register


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## TAO22 (Dec 30, 2010)

Good Morning Canoeman,

Thankyou for your advice again which I greatly appreciate 

What you have said makes more sense now...yes I am aware of the simplified regime and as this is a fledgling business and just myself involved at present, this was the easiest and also safest option to opt for (at least for the initial year until turnover and profit were apparent). 

I was also advised about the 10,000 IVA threshold and so felt that in the initial year the simplified regime and keeping it fairly small would be appropriate (unless of course business was far beyond my wildest dreams and business plan 

I understood that I wasn't required to employ an accountant if it was simplified regime and just me working alone??...

That said, I do use an accountant to complete my accounts and year end tax return...all be it a very minimal job.

What you have said regarding the 3 years makes a lot of sense, thank you for clarifying that! 

So, as a sole trader under simplified regime......Is there anything I can claim back/offset that you are aware of please? I suspect that this will only come into play if I register under the standard accounting regime?

Also, my business involves selling at both markets and on the internet. I understand that it is a mandatory requirement to give all my customers a sales receipt.....however, at the markets no-one seems to do this??! Don't get me wrong, I personally think it's ridiculous to have to give a receipt on a market stall.....but is this correct....or are there any exceptions for ambulent vending I wonder?

Thanks again and sorry I have so many questions....but your advice is invaluable and makes more sense to me than anything I have been advised


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## canoeman (Mar 3, 2011)

No under Simplified Regime your "profit" is a straight percentage of your turnover, your only "claim" as such are the other personal allowances you have or are entitled to like health costs, certain insurances etc. 

Major benefit of SR against Standard Accounting is that *you don't* have to employ an account with SA *you must* but the question is does the cost of an accountant on a monthly basis (returns are monthly) cover the "possible" tax relief, 
Not certain about Capital Investment or how that works here so possibly an area to look at

There's been a tremendous crack down on receipts, so yes you do, don't believe Financas have a concept for "ambulent vending" but markets ? think it really depends on what your selling but you should certainly have the "approved" methods of issuing receipts in place, equally internet as Financas can inspect your bank accounts


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