Understanding Preliminary Tax 2013

This is an area that sometimes people fall down on and it is worth mentioning again and again.

Preliminary Tax 2012 is just as important as paying the tax due for the current year.

There are three options to calculating preliminary tax due;

1. Pay 90% of your total tax liability for 2013.
2. Pay 100% of your tax liability for 2012*.
3. Pay 105% of your total tax liability for 2011.

The first option will probably be the most common option if the taxable income for the year has fallen considerably since the previous year.

If the third option is chosen you must set up a direct debit arrangement.

*In calculating option 2 above:

• Any relief claimed under the Business Expansion Scheme and the Employment and Investment Scheme must be ignored.
• Any relief for investments in films must be ignored.

It is vital you pay the right amount of preliminary tax as failure to do so may attract interest penalties of 0.0219% per day.

Contact OSK today for more information on preliminary tax for Ireland.