Preliminary 2018

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Feemar5

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I have just doing my tax return for 2017 on form 11. I am now retired and pay PAYE but because I have a rented property I had to use form 11 for the last number of years. My query is how much Preliminary tax I should pay for 2018 - for 2017 I paid €2000 but because I also pay PAYE I am due a refund of just over €2000 mostly due to ARF drawdown being taxed at 41% I believe that I should pay 90% of 2017 figure but because I also pay PAYE does this still apply. Also I expect my income to be lower in 2018. I would appreciate any comments.
 
According to the Revenue website
To avoid interest charges, you must pay an amount of Preliminary Tax that is at least one of the following:

  • 90% of the tax due for that year
  • 100% of the tax due for the preceding year
  • 105% of the tax due for the pre-preceding year (this option only applies where you pay by direct debit - it does not apply if the tax due for the pre-preceding year was nil).
Click to expand...
So for the Preliminary Tax due this November your choices are

90% of the tax due on your 2018 income - if you can estimate your income for 2018 reasonably well by the end of October, then this is a good way to go.
100% of the tax due on 2017 income - you will know this when you submit your 2017 Income tax return but if your income and tax will be lower in 2-018 not a great option as you will be lending money to the Revenue
105% of the tax due and paid on your 2016 income - same comment as above
 
Hello,

I’m assuming your position is like this:

Liability- refund (5)
Preliminary tax 2017 (2,000)

Total refund (2,005)

Following on from jpd’s post ..,


Sure you could opt to 90% of 2018 position.. this involves guess work and as your tax figures aren’t huge I wouldn’t go to the hassle of it ..


As I think you are in a refund position for 2017 before taking account of the preliminary tax paid .. you can opt to pay 100% of your 2017 liability (as per eg -5) which would be nil!!

But if I were you and not desperate for the cash I would just put the entire refund to preliminary tax. You aren’t going to get much interest in the bank anyway and it could come in handy if you had a tax bill next year... (yes it is lending money to Revenue but I’m not too worried about that ...)

The 105% option based on your 2016 liability is only available where you pay by direct debit and you have to have at least 3 payments in year 1...

Well that’s my 2 cent worth!!
 
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