Use savings or take out loan to pay tax bill?

starterupper

Registered User
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4
Hi,

I have a large tax bill coming up (self-employed).

Tax bill is €5,500 due in November. I messed up and hadn't put enough money aside to cover it.

I can put around €2,000 towards it from my current account but what should i use to cover the rest?

€2,400 in savings with bank (saving for a house: €800 monthly)
€1,000 in savings with Credit Union (so could get loan)
€3,200 available on my credit card (last resort)

I'm worried dipping into my house savings will look bad on a future mortgage application. Is it enough of a black mark to go so far as to get a credit union loan instead, solely to leave my savings untouched.
 
The deadline is end of October, only extended if you pay (in full on time afaik) and file via ROS.

Pay as much as you can before 31 Oct, you will be surcharged 5% of the outstanding amount of anything that is unpaid . And a further 5% of anything outstanding at 31 Dec.

The bank for the mortgage will not know. If you submit the return on time Revenue will probably not contact you about the outstanding until April, by which time you might have reduced the balance.

This is probably more expensive than borrowing the money, but in my opinion much cleaner.
 
If the amounts mentioned are the totals of your savings a mortgage application is a long way off and I wouldn't be too worried about what a bank will think when the time comes, I don't think they'll be looking back this far. I'd recommend using your savings to pay your tax bill, borrowing or paying surcharges is going to cost you unnecessarily. The reality is that you haven't been saving for a house, you were saving for your tax bill but just didn't know it. At least you are now in the savings habit so keep it up and it won't be long til they accumulate.
 
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