Preliminary tax again

M

marcin

Registered User
Messages
20
Hi Guys/Girls,


Thanks for all your help before.

Now It's time for Preliminary tax.

I know the rules.

100% of last's year or 90% of current years tax.

But Can I just choose the rule that is better for me?
Or Should I choose the rule that is closer to the final tax?


Example case:

Tax for 2008: 0 - NIL
Approx profit for 2009: €10000 - prediction

Obviously in this case I would use the 100% of the NIL rule for preliminary tax.

But Looking at the accounts now I know that the tax for 2009 will be at least €2000 (20% x €10000).

So which one should I choose?
 
Marchin

You should chose Nil.

So long as you pay at least what ever you paid last year you will be safe.

Kind Regards

dbran
 
Would Marcin have then to pay interest of the difference i.e. on the €2000? 10% Interest rate I believe. So that would be €2200.
 
DBRAN said:
Marchin

You should chose Nil.

So long as you pay at least what ever you paid last year you will be safe.

Kind Regards

dbran
Click to expand...

So long as you pay what you paid last year plus an adjustment for the impact of the income levy. i.e. if your income was €20K last year and you liability zero, then your prelim should be liability for last year (nil) plus an adjustment for the income levy (€20K * 2%). Total prelim tax payable €400.

Past30
 
Last edited:

Given that the OP mentions "profit", has posted in the "Askaboutbusiness" section and the 21/23 September submission deadline for companies with 31 December 2008 year ends is next week, is it fair to assume he's talking about preliminary corporation tax? If that's the case, the income levy isn't relevant (and as others have pointed out you'd pay 100% of 0, i.e. 0).
 

Not necessarily. Sole traders make profit. Sole traders have businesses and post in "askaboutbusiness" ( me for one ) The OP may indeed be talking about either October Prelim Income Tax or imminent Prelim Corp Tax. ( Of course only they can clarify this )
 

That was an assumption on my part. Preliminary tax for sole traders is quite a popular topic in work at the moment.

Past30
 
Thanks to All. YEs. I'm a soletrader. And I'm talking about October Prelim Income Tax. Sorry, forgot to mention that. I do it in all my posts, but forgot in that one.

So I will pay 100% of 0 = 0.

But this income levy, that's new...
 

The OP stating "Now it's time for preliminary tax" on 16 September and the language used above suggested to me that he was talking about preliminary corporation tax. Hardly unreasonable on my part, given that 21/23 September could be described as "now" while 31 October/16 November could not.
 


For any sole-trader expecting to pay preliminary tax in October or up to Nov 16, that is most definitely now. Most people need a little to get funds together and we have been talking 2009 Prelim Income Tax estimates with clients since early August. I would sincerely hope that most sole-traders are thinking 2009 Prelim Income Tax now and not waiting until the week before it's due. The OP is doing the right thing by thinking of it now.
 
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