Preliminary Tax & PAYE/PRSI Direct Debit scheme

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sandyh2001in

Registered User
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Folks, two questions :

1) Preliminary tax: I understand there is a requirement to pay either 100% of previous years or 90% of current years tax liability to Revenue in October as 'Preliminary tax'.

Does this relate to Corporate Tax only or also for Income tax (PAYE/PRSI/USC)

2) Direct debit scheme: Under this scheme, one can make monthly payments to Revenue for PAYE/PRSI, but if these payments are insufficient (or in other words, at EOY if outstanding tax liability is more than 10% of total payments made, then one is liable to interest.

I started my compnay in July 2011 and enrolled in DD schemen in Oct-11 and made 3 DD payments of PAYE/PRSI to Revenue amounting to 2100 EUR. Things have changed and I have decided to take a significantly larger Dec-11 salary (to clear down my company profit at EOY). outstanding tax is around 40K.

Problem is I dont know if the requirement to pay Prelim tax applies to Income tax. My accountant filed a ZERO prelim tax return in Oct. (probably based on CT being ZERO for 2010??) Is Prelim tax an issue for me.

Secondly, since outstanding tax bill 40 K is much larger than 2 K i have paid till date to Revenue through Direct debit scheme, will Revenue charge interest/ how much? starting when?

thanks
 
You mention Corporation Tax. Are you a Ltd Company or Self Empoloyed? the october deadline is for self employed (income Tax)



For PAYE / PRSI / USC -check is there anything here... [broken link removed]
 
I am a limited company.
My accountant filed a ZERO return for Preliminary tax and at the same time had me enroll in the Direct debit scheme.
Im wondering now, if Im liable to any penalties whatsoever as I have not been paying the tax due at an appropriate rate this year.
 
Corporation tax

be careful not to confuse the calendar year and your fiscal year for your company. Preliminary tax payment obligations are explained here. This is only for corporation tax http://www.revenue.ie/en/tax/ct/payment.html

**New or Start-up companies

New or Start-up companies with a Corporation Tax liability of €200,000 or less for their first accounting period will not be required to pay Preliminary Tax in respect of that first accounting period and will instead be required to pay their final Corporation Tax liability for that accounting period at the same time as they are required to submit their Corporation Tax return, i.e. within nine months after the end of the accounting period,

PAYE/PRSI

Is the 40k paye/prsi/usc - the link in my previous post should cover that -

Edit -- going by this it is due by the 15th of Feb with your P35 for 2011 [broken link removed]

--any later then that and the following applies

Where insufficient amounts are paid by direct debit and there is a balance of tax payable at the end of the accounting year, interest is payable if the amount is not paid by the due date. In addition if the amount due exceeds: 10% of the annual liability for PAYE/PRSI,
interest will be back-dated to the mid point of the accounting year. i'm guessing here they mean the calendar year......


(currently at the rate of 0.0322%) for each day or part of a day for which payment is overdue.
 
Sandy -- just thinking - maybe the Nil Prelim tax submitted by your accountant was for your ow self assessed income for 2011 --- separate to the company ???

Also -- if you started the company in July 2011 , why did you choose to have your first year end as 31 December? There is probably a valid reason but a longer accounting period would have given you more time to draw out the large additional salary
 
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