Preliminary TAX Payment

Hi all,

I mentioned some months ago about a family friend who had a liability with the Revenue (vat).

In summary, he closed his business down this year and is no longer self employed but continues to make payments against his liability.

He is now in the process of filing income tax for 2014 and his accountant has informed him that if he has a liability for that year he will be required to pay preliminary tax for 2015. However I am aware there wont be an income tax liability.

As there is still an outstanding vat liability outstanding can preliminary tax be demanded on this basis?

Jeepers that's crap advice. Remembering back to your previous thread, is this the same accountant who told your friend they'd be better off dealing with Revenue themselves?! Probably good advice given how incompetent the agent seems to be.

Simple answer is this, if your friend is satisfied their income tax liability (other than PAYE deducted at source) for 2015 will be nil then they needn't pay any preliminary tax. This is regardless of whether there's a liability for 2014...

The reason being the prelim tax requirement is the lesser of:
100% of the previous year's (2014) liability, and 90% of the current year's liability (2015). So obviously, 90% of zero is zero.