Provisional Tax

dgtech

I am self employed and am due to pay provisional tax for the first time along with last years tax. I was wondering how much will this be approximately ?
Thanks.

prettyrestless

I assume you mean preliminary tax?

From the Revenue.ie website:

Preliminary Tax is your estimate of Income Tax and related charges payable by you for a tax year and must be paid by 31 October in the year in question. In calculating your Preliminary Tax payment you should ensure that it covers your liability to PRSI and Universal Social Charge, as well as Income Tax.

To avoid interest charges, the amount of preliminary tax paid for a tax year must be equal to or exceed the lower of:

90% of your final liability for the tax year, or
100% of your final liability for the previous tax year, or
105% of your final liability for the pre-preceding tax year. (This option is only available where preliminary tax is paid by direct debit and does not apply where the tax payable for the pre-preceding year was nil).

Ted_YNWA

dgtech wrote: »

I am self employed and am due to pay provisional tax for the first time along with last years tax. I was wondering how much will this be approximately ?
Thanks.

Iirc, i believe the provisional tax forthis year should be 80% of last years liability. on phone at the minute, so can't confirm.

Does Revenue site give more info.?


Edit : just seen Revenue quoted above.

dgtech

This is easier to research when I have the right term! If the liability is calculated on 100% of last years return which was quite low anyway, do I calculate the preliminary tax based on the income earned or the liability paid in that year. For example, I got extra credits last year for being PAYE which reduced the liability. However, if I calculate based on the same income, my liability will be higher.

prettyrestless

Your income last year doesn't factor into the calculation.

Let's say for 2012 your income was €500, and your final tax liability was €100 (excluding any preliminary tax for 2011). Your preliminary tax for 2013 is €100, regardless of whether you had extra credits/reliefts in that year or not.