Preliminary tax

juncert

Im trying to understand peliminary tax and wonder if someone can help me.So say someone in

2012 paye
2013 chargeable 10,000
so in Oct 2013 can pay nil under the 100% previous year

2013 10,000
2014 15,000
Oct 2014 can pay 10,000 under 100% previous year

2014 15,000
2015 10,000
Oct 2015 pay 90% of 2015 9,000

2014 15,000
2016 5,000
Oct 2016 pay 1,000 due from 2015,and 5,000 for 2016

2014 15,000
2017 5,000
Oct 2017 this is where my understanding goes,because 2014 is not (1)current year (2) previous year (3) pre preceding year.
By paying the smallest amount each year 2014 has just been carried forward and now it does not fit any of the three options.I must be missing something in my understanding ,can anyone please explain where im going wrong.I'm not making a return just trying to understand preliminary tax.Many thanks.

2ndcoming

juncert wrote: »

Im trying to understand peliminary tax and wonder if someone can help me.So say someone in

2012 paye
2013 chargeable 10,000
so in Oct 2013 can pay nil under the 100% previous year

2013 10,000
2014 15,000
Oct 2014 can pay 10,000 under 100% previous year

2014 15,000
2015 10,000
Oct 2015 pay 90% of 2015 9,000

2014 15,000
2016 5,000
Oct 2016 pay 1,000 due from 2015,and 5,000 for 2016

2014 15,000
2017 5,000
Oct 2017 this is where my understanding goes,because 2014 is not (1)current year (2) previous year (3) pre preceding year.
By paying the smallest amount each year 2014 has just been carried forward and now it does not fit any of the three options.I must be missing something in my understanding ,can anyone please explain where im going wrong.I'm not making a return just trying to understand preliminary tax.Many thanks.

I think I see what you're missing. Here goes:

2012 PAYE
2013 Chargeable 10,000
You can either pay 9,000 (90% current year) or nothing (100% prev year)

2013 Chargeable 10,000
2014 Chargeable 15,000
You can either pay 20,000 (liability 10k + 100% prev year prelim) or 23,500 (liability 10k + 90% current year prelim)

2014 Chargeable 15,000
2015 Chargeable 10,000
Here's where what you've paid as prelim the previous year starts to affect it.
If you paid 10,000 prelim you pay either 20,000 (liability 5k + 100% prev year prelim) or 14000 (liability 5k + 90% current year prelim). If you paid 13,500 prelim you pay either 16,500 (liability 1.5k + 100% prev year prelim) or 11,500 (liability 1.5k + 90% current year prelim)

And so on.

Edit: If you paid the 9k in the first year it would affect from the second year as described for the 3rd year.

juncert

juncert wrote: »

Im trying to understand peliminary tax and wonder if someone can help me.So say someone in

2012 paye
2013 chargeable 10,000
so in Oct 2013 can pay nil under the 100% previous year

2013 10,000
2014 15,000

SO THIS SHOULD BE 20,000 (10,000 + 10,000) OR 23,500(10,000+13,500)

2014 15,000
2015 10,000

THIS SHOULD BE IF HE PAID 14,000(5,000+9000) OR 10,500(1500+9000)
SO GO WITH THE 10,500



2016 5,000
THIS SHOULD BE IF HE PAID 5500(1000 + 4500)



2017 5,000
THIS SHOULD BE 5000(500+4500)

Oct 2017 this is where my understanding goes,because 2014 is not (1)current year (2) previous year (3) pre preceding year.
By paying the smallest amount each year 2014 has just been carried forward and now it does not fit any of the three options.I must be missing something in my understanding ,can anyone please explain where im going wrong.I'm not making a return just trying to understand preliminary tax.Many thanks.

Thanks so much its getting clearer, I have written in the new amounts to pay above.
Im reading an example in a book and it was getting me confused
2012 nil
2013 10,000
2014 15,000
example says 2013 paid nil,2014 paid 10,000
should 2014 not be 10,000+13500 or 10,000+10,000 ?
Sorry for wreaking you head

CIARAN_BOYLE

juncert wrote: »

Thanks so much its getting clearer, I have written in the new amounts to pay above.
Im reading an example in a book and it was getting me confused
2012 nil
2013 10,000
2014 15,000
example says 2013 paid nil,2014 paid 10,000
should 2014 not be 10,000+13500 or 10,000+10,000 ?
Sorry for wreaking you head

The example is probably only concerned with preliminary tax and is assuming that you know to pay your normal tax or else it is dealt with elsewhere in the book

juncert

Thanks ciaran,the example says he only needs to pay 10000 and will avoid interest charges,so total paid was 10000.but looking at it he should pay 20000 or 23500 to avoid interest charges.

CIARAN_BOYLE

juncert wrote: »

Thanks ciaran,the example says he only needs to pay 10000 and will avoid interest charges,so total paid was 10000.but looking at it he should pay 20000 or 23500 to avoid interest charges.

But only 10,000 is preliminary tax the other 10,000 is actual tax due to revenue. That section of the book is only concerned with preliminary tax.

juncert

So,in 2014 the preliminary tax from 2013 is now a liability, actual tax,its now not preliminary tax.I was seeing it as a preliminary tax, not paid but due.That is why I was adding the two amount due together to get the amount to pay.
Where they said he had to pay 10000 before 31 Oct 2014 to avoid interest charges that was only for preliminary 2014.
So he still has to paid the other 10,000 or 13,500 but its not called preliminary.This has to be paid before 31 Oct 2014 I presum or he will be charged interest?
I hope thats it,thanks for the help,teacher never taught a class before and i could not get my head around it