Question about preliminary tax

brophs

Hi,

Brief question about preliminary tax, if you don't mind. The Revenue site says that the figure is:

a. 90% of your final liability for the tax year, or
b. 100% of your final liability for the previous tax year, or
c. 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).

I am now in the process of getting ready to file my Income Tax for 2013/pay Preliminary Tax for 2014. Possibly a daft question, but in (a) above is the tax year referred to 2014? And if so, does that mean (b) is referring to the year 2013?

For example:

Using simple figures, say my final tax liability for:

2012 = €1,000
2013 = €2,000
2014 = Estimated at €3,000

Does that mean if I choose to pay Preliminary Tax on (a) above that I would pay 90% of 2014 ie 90% of €3,000?

Or if I chose to pay using (b) that I pay 100% of 2013 ie 100% of €2,000?

The reason I ask is that it was suggested to me that the tax year referred to in (a) was 2013 which meant that the tax year referred to in (b) was 2012 therefore I would have the option of paying 100% of 2012 ie €1,000.

I suspect that's wrong, but I just wanted to confirm with you clever folks.

Thanks in advance.

peter5005

a) 2014
b) 2013

I think its best to pay 100% of 2013 as you dont know what your profit for 2014 is till the year is over.

Dont forget your add backs to adjust your net profit, very common mistake