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Preliminary tax calculation question

  • 29-09-2019 3:05pm
    #1
    Moomintroll99
    Registered Users, Registered Users 2 Posts: 79 ✭✭


    Quick question on calculating preliminary tax 2 years into sole trader business.

    So I have been a sole trader since 2017. I had a liability of €1300 for 2017, so paid the same as preliminary tax for 2018 = €1300 x 2 = €2600 to Revenue.

    I'm now about to send my docs to accountant to file for 2018. Say I owe €2000 in total for 2018, how do they work out the preliminary tax for 2019?

    Is it that my total OWED this year is €2000 less the €1300 from last year = €700 for 2018, so I pay €700 for 2019 preliminary tax for a total of €1400?

    Or is it that my total TAX LIABILITY is €2000 so I pay €4000 for 2018 and 2019, less the €1300, so a bill of €2700?

    Thanks so much anyone who can help, this is sending my stress levels through the roof!


Comments

  • #2
    Stratvs
    Registered Users, Registered Users 2 Posts: 958 ✭✭✭Stratvs


    If, as you say liability for 2018 comes out at €2,000 then the balance of 2018 after payment of the €1,300 prelim tax is €700.

    Using the 100% rule then prelim tax for 2019 becomes 100% of 2018 which is €2,000.

    Total payment due to Revenue therefore is balance of 2018 of €700 and prelim tax 2019 of €2,000 so €2,700 in total.


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