Changing Preliminary Tax Payment %

2

24601

Registered User
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I had some exceptional income in 2022 which resulted in me having an IT liability of about 10k more than normal, resulting in a significant enough balance of tax to pay, which I allowed for. I'd like to not pay 100% of this as my preliminary tax for this year as I expect my income to return to pre-2022 levels. I'm am looking at the DD option of paying 105% of the pre-preceding year's liability, but I think I'd prefer to remain with the lump sum option for cash flow purposes. If I go with the option to pay 90% of the final tax liability for the current year of assessment do I have to notify Revenue or do I just make the payment in November? What if it ends up being <90% of the actual liability? Are Revenue likely to penalise me if I pay the balance in January 2024? (I am reasonably confident I can get it fairly accurate).
 
If you pay less than 90% of the tax due, then you are liable for penalties

If you have a good idea of your tax liability by mid-Nov, then just pay what you think is due.
If you can get it fairly accurate, then pay 100% or 110% by mid-Nov
 
T McGibney said:
Interest, not penalties.

Otherwise, it's impossible to comment meaningfully to @24601 as we have no idea of the scale of the sums involved.
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Nothing too hectic. My net profit was 73k in 2021 with a liability of 24k-ish. Net profit in 2022 was over 90k with a liability of 34k-ish. I'd expect to be closer to the 73k this year so the 34k in preliminary tax would be fairly hefty if I'm going off 100% of 2022's liability.
 
24601 said:
Nothing too hectic. My net profit was 73k in 2021 with a liability of 24k-ish. Net profit in 2022 was over 90k with a liability of 34k-ish. I'd expect to be closer to the 73k this year so the 34k in preliminary tax would be fairly hefty if I'm going off 100% of 2022's liability.
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For 2022, it's sufficient for you to pay preliminary tax of 100% of your 2021 liability, ie €24k.

Or is your question about what you need to pay next November for 2023?
 
T McGibney said:
For 2022, it's sufficient for you to pay preliminary tax of 100% of your 2021 liability, ie €24k.

Or is your question about what you need to pay next November for 2023?
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Sorry if I wasn't clear enough, I am asking about my preliminary tax for 2023, I already paid 2022 in November 2022.
 
24601 said:
I had some exceptional income in 2022 which resulted in me having an IT liability of about 10k more than normal, resulting in a significant enough balance of tax to pay, which I allowed for. I'd like to not pay 100% of this as my preliminary tax for this year as I expect my income to return to pre-2022 levels. I'm am looking at the DD option of paying 105% of the pre-preceding year's liability, but I think I'd prefer to remain with the lump sum option for cash flow purposes. If I go with the option to pay 90% of the final tax liability for the current year of assessment do I have to notify Revenue or do I just make the payment in November? What if it ends up being <90% of the actual liability? Are Revenue likely to penalise me if I pay the balance in January 2024? (I am reasonably confident I can get it fairly accurate).
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preliminary tax equal to 100% of the obligation for the prior year. In most cases, choosing this option will spare you from paying preliminary tax.
 
SandraGuy said:
preliminary tax equal to 100% of the obligation for the prior year. In most cases, choosing this option will spare you from paying preliminary tax.
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I don't understand. You can't be "spared" from paying preliminary tax.
 
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