Unable to pay full preliminary tax query

hawkelady

Hi all , you guys here have been good to me before with advice . Hope someone here can still help me with this one .
I rent out a property and after all the bits and bobs my tax liability is usually between 2k/2.5k a year.
I have an accountant look after it for me btw.
Last year my accountant asked me for preliminary tax of the same ammount !
I told them that I just didn't have 5k for it .. I was worried sick , I managed to russle up €500 extra for them .
Roll on to today where I was asked again for PT plus the normal tax for the 2014 yr ( the pt for 2015). I simply don't have it .. My accountant told me that I will be hit with penalties because I don't have the full ammount for preliminary tax !!
I'm worried sick again as I've no idea how this works .. My basic knowledge is that Revenue expect me to pay them next yrs tax in advance even though I haven't even got rent for next yr yet .

Can someone give me advice ? Could I call into revenue and explain my situation or would that be a waste of time ? How much would the penalties be ?
The stress of it !!
Thanks in advance

howardmarks

hawkelady wrote: »

Hi all , you guys here have been good to me before with advice . Hope someone here can still help me with this one .
I rent out a property and after all the bits and bobs my tax liability is usually between 2k/2.5k a year.
I have an accountant look after it for me btw.
Last year my accountant asked me for preliminary tax of the same ammount !
I told them that I just didn't have 5k for it .. I was worried sick , I managed to russle up €500 extra for them .
Roll on to today where I was asked again for PT plus the normal tax for the 2014 yr ( the pt for 2015). I simply don't have it .. My accountant told me that I will be hit with penalties because I don't have the full ammount for preliminary tax !!
I'm worried sick again as I've no idea how this works .. My basic knowledge is that Revenue expect me to pay them next yrs tax in advance even though I haven't even got rent for next yr yet .

Can someone give me advice ? Could I call into revenue and explain my situation or would that be a waste of time ? How much would the penalties be ?
The stress of it !!
Thanks in advance

Preliminary tax for 2015 is due 31/10/2015. So essentially you have earned 10 mths of this income your paying prelim on. Its not really next years tax as you put it.
That aside you should consider that revenue offers a direct debit to help meet your preliminary tax. This may be a solution to your issue allowing you spread the cost. Hope this helps

filbert the fox

hawkelady wrote: »

Hi all , you guys here have been good to me before with advice . Hope someone here can still help me with this one .
I rent out a property and after all the bits and bobs my tax liability is usually between 2k/2.5k a year.
I have an accountant look after it for me btw.
Last year my accountant asked me for preliminary tax of the same ammount !
I told them that I just didn't have 5k for it .. I was worried sick , I managed to russle up €500 extra for them .
Roll on to today where I was asked again for PT plus the normal tax for the 2014 yr ( the pt for 2015). I simply don't have it .. My accountant told me that I will be hit with penalties because I don't have the full ammount for preliminary tax !!
I'm worried sick again as I've no idea how this works .. My basic knowledge is that Revenue expect me to pay them next yrs tax in advance even though I haven't even got rent for next yr yet .

Can someone give me advice ? Could I call into revenue and explain my situation or would that be a waste of time ? How much would the penalties be ?
The stress of it !!
Don't worry, have a look at the following quote from another forum in response to a Landlord who boasts about not paying tax:

"There is a pretty strict tax risk/reward method to decide whether a person is worth pursuing. Many variables, one being inactive PRTB registrations, feed into Revenue's systems which measure risk which in turn decide audit potential".

(I say this as a Revenue employee.)


my own feeling is that Revenue generate this preliminary tax notification automatically and are not targetting you. If you pay your tax in the following year as required then they should be satisfied, bearing in mind the quote above.

hawkelady

Thank you .. Whether it's true or not , it has calmed me. Cheers for that.

barneystinson

One word for you OP: INTEREST.

You have 2 obligations under self assessment, and the hint is in the name they use on the forms: PAY and FILE.

Surcharges and penalties apply to people who FILE their tax return late, or FILE an incorrect return.

INTEREST is the sanction is for paying tax later than it was due. It runs at c.10% p.a. simple interest. As already explained, preliminary tax is payable on 31 Oct for the CURRENT YEAR, by which time you will have received most of your income for the year. You then have until 31 Oct of the following year, to calculate your final liability, file your return and pay the balance.

dbran

So as Barney has stated above you may have an interest penalty to pay of €250 when it comes to the time you file your final tax return for that year and that is if you did not pay any preliminary tax at all. You can also make top up payments during the year if you come into additional funds. As also mentioned you can pay income tax by direct debit.

I believe it is 0.0219% per day which is 8% per annum.

Revenue dont always levy the interest especially if the amount is relatively low.

dbran