Contractor accounting in Ireland for consultants and freelancers

Consultancy is a supply of services, so registration becomes compulsory once turnover exceeds, or is likely to exceed, €42,500 in a twelve-month period. Many contractors pass that within months. If your clients are VAT-registered businesses, registering early often costs them nothing and lets you reclaim VAT on your own equipment and software.

Services to VAT-registered business clients in other member states are commonly zero-rated or reverse-charged, with the client accounting for the VAT. Revenue requires a VIES statement from Irish traders who zero-rate services to VAT-registered customers elsewhere in the EU, so capture each client’s VAT number and code those invoices separately.

Accountable persons, as Revenue calls them, must deduct PSWT at 20% from payments for certain professional services. If you work for a body that deducts PSWT, record the full fee as income and the tax withheld separately, because Revenue’s PSWT pages explain how deducted tax is credited against your own tax. Keep the deduction documents with the invoice.

From the Pro plan, HelloBooks invoices in other currencies and records each invoice at its exchange rate, with differences on payment posted to the ledger. VAT figures stay in euro for the VAT3.

Many contractors trade through their own limited company, others as sole traders. The bookkeeping in HelloBooks is the same either way: invoices, costs, bank and VAT. What differs is how profits are taxed and drawn, which is a conversation for your accountant before you start, not after the first year.

Invoice each client at month end, upload the bank statement when the payments land, photograph receipts as you spend, and confirm the coding in one sitting. For a contractor with a handful of clients, that is well under an hour a month.

Laptops, software subscriptions, professional fees, training and home-office costs are easy to miss. Photograph receipts and upload bills as they arrive; HelloBooks reads them and proposes an account. Software bought from outside Ireland may need the reverse charge, so leave those lines for your accountant to check.