Preliminary tax 100% or 90% rule?

mike97

Hi there,
I'm a sole trader so I must fill the FORM 11 etc.

I have a dilemma, when I filled my form 11 for tax return 2010, the form automatically calculated my liability for 2011 Preliminary Tax Purposes with the 100 % rule.
My tax liability for 2010 was a bit more than the minimum PRSI e.g. 300 euros.

The form 11 for 2010 automatically used 100 % of 300 euros plus 2 % of USC e.g. 120 euros.

Total Liability for 2011 Preliminary Tax 300 + 120 = 420 euros

If I use the 90 % rule, which is 90 % of what I estimate is due for the year 2011; at the moment my Profit & Loss account shows a loss and the two remaining months (November & December) won’t be enough to reverse the account to make me liable for 2011 tax. Therefore my Tax liability for 2011 will be the minimum PRSI 253 euros & nil for USC.

So can I say for 2011 Preliminary tax is 90 % of 253 euros (PRSI) & Nil for USC ?
With the 90 % rule my preliminary tax figure for 2011 is 253 euros instead of the 420 euros from the Form11 2010 automatically calculated using the 100 % rule.
Am I right to go with the above 90 % rule on the assumption that my Profit & Loss account are correct?

Any helps would be appreciated;

Thanks,

mike97

mari2222

best go with revenue calc of 100%: this saves you any hassle later if 2011 does not pan out as expected: any overpayment will not be "lost", but will be credited to a later tax period.