This is a hang-up from the days when the Revenue Commissioners spoke about the amount of uncollected taxes in the system as a “crock of gold”. Since PAYE taxpayers have their income tax deducted at source by their employers and handed over to the Revenue Commissioners, it doesn’t take a genius to work out that the state’s missing millions had to be accounted for among the self-employed.

Don’t people on PAYE realise how lucky they are? The amount of administration involved in maintaining self-employed status is ridiculous.

I couldn’t agree more. In the first place you have to keep records of your entire income and expenditure over the tax year. Then you have to classify your spending into personal and business and make sure you claim only for the relevant portions. If you are registered for Vat, that opens up a new area of financial management with a choice between annual or bi-monthly returns. And be careful not to miss the deadlines or the Revenue will really get into you. There is an annual Vat return, so make sure you keep full records. You’ll need them because you may face a Vat inspection at any time.

Why would I have to pay Vat when I don’t sell goods?

Vat is payable by anyone supplying services to the value of €25,000 or more per year. You don’t have to register with the Revenue Commissioners if your income is below the threshold, but they love it if you do. They will give you your own Vat registration number, so you’ll be more than just a name on a piece of paper. As a self-employed operator, you will also be required to fill in tedious forms for the Central Statistics Office.

What does the CSO want from me?

They just want to know what you’re up to, what kind of business you have and when you started. It’s just a survey so that they can compile statistics and it’s confidential, so say what you like.

All that form-filling, filing and reconciliation eats into my weekends. And you haven’t told people about the cost of accountants yet.

If you persist in turning up at your accountant’s office in the last week of October carrying a Tesco bag bulging with receipts and invoices, you can expect to be charged through the nose.

Accountants are only human (don’t laugh) and if they charge by the hour, you can expect to be punished for your lack of organisation. But if you keep your records up to date, the cost of preparing that final return need not hit four figures. A simple financial management software program is a good long-term investment.

One of my clients has asked me if I would like a more permanent position with his company. He might even bring me in at director level. Would this be a bad move?

Not necessarily. Many self-employed people would be better off as PAYE members in a formal company set-up. They might have better job security, benefits-in-kind and possibly a company pension. Against that, they will be losing the expenses that they claim against their earnings. When you add those up against the possible benefits, they might not amount to all that much anyway.