need help on preliminary tax

Coala

hi I have got from Revenue notice of assessment for 2010. Here is the breakdown:

Total tax liability 3066.12
Late payment penalty 10% 306.61

---

Total 3372.73
Less paid 1455.00

---

Balance payable 1917.73

Amount for 2011 preliminary Tax purposes 1195.06

I need a help on how was the preliminary tax calculated, i tried all possible versions how it could be calculated. Tax for 2009 was zero as there was a loss. Please help me on this

Itchianus

Coala wrote: »

hi I have got from Revenue notice of assessment for 2010. Here is the breakdown:

Total tax liability 3066.12
Late payment penalty 10% 306.61

---

Total 3372.73
Less paid 1455.00

---

Balance payable 1917.73

Amount for 2011 preliminary Tax purposes [COLOR="Red"] 1195.06[/COLOR]

I need a help on how was the preliminary tax calculated, i tried all possible versions how it could be calculated. Tax for 2009 was zero as there was a loss. Please help me on this

What type of income is on your return? is there PAYE income as well as self employed?

The preliminary tax amount is pretty much irrelevant at this stage anyway, since 2011 is now due to be filed...

Coala

Only self employed income. Yes 2011 is now due but i would be very happy to know where that figure is coming from. I am learning accountant and its is important for me to know what is going on.

labradoodlelady

In 2010 the returns submitted on ROS included an amount suggested for preliminary income tax. This was to facilitate the fact that the P/T calculation was including the USC rather than income levy. Their formula did not factor the change in tax credits in 2011, but looked at income from the different tax heads for 2010, and calculated tax, prsi and USC on same and that was the amount for P/T.


From the information you have supplied it is impossible to set out for you how this was calculated.

Coala

labradoodlelady wrote: »

In 2010 the returns submitted on ROS included an amount suggested for preliminary income tax. This was to facilitate the fact that the P/T calculation was including the USC rather than income levy. Their formula did not factor the change in tax credits in 2011, but looked at income from the different tax heads for 2010, and calculated tax, prsi and USC on same and that was the amount for P/T.


From the information you have supplied it is impossible to set out for you how this was calculated.

That looks quite complicated. Can i ignore that calculation and just pay P/T as normal? Balance 10% on 2011 tax and 90% on 2012%? Or better ask for assessment?

labradoodlelady

You need to speak to an accountant.


The calculation for 2011 P/T was specific, given the move from income levy to USC. As 2012 also has the USC, it goes back to the 90/100/105 rules as appropriate.

Your tax return for 2011 is due to be filed and paid on Ros by Wednesday to avoid penalty.

You seem to be waiting for a notice of assessment to issue. I presume you are sending a paper return, and paying when you receive the assessment. Your return will be deemed late and you will get a late filing penalty again?...

Your preliminary tax for 2011 should have been paid by 15 November 2011 (last year). It is already late at this stage.

Pay the balance of tax due for 2011 on your return and pay 100% (not 10%) of that amount as P/T for 2012 to meet the requirement. Unless your profits for the current year (2012) are vastly different, I wouldn't bother with the 90% of the current year.

Coala

labradoodlelady wrote: »

You need to speak to an accountant.


The calculation for 2011 P/T was specific, given the move from income levy to USC. As 2012 also has the USC, it goes back to the 90/100/110 rules as appropriate.

Your tax return for 2011 is due to be filed and paid on Ros by Wednesday to avoid penalty.

You seem to be waiting for a notice of assessment to issue. I presume you are sending a paper return, and paying when you receive the assessment. Your return will be deemed late and you will get a late filing penalty again?...

Your preliminary tax for 2011 should have been paid by 15 November 2011 (last year). It is already late at this stage.

Pay the balance of tax due for 2011 on your return and pay 100% (not 10%) of that amount as P/T for 2012 to meet the requirement. Unless your profits for the current year (2012) are vastly different, I wouldn't bother with the 90% of the current year.

thank you labradoodlelady for answer and advise, as i said I am learning accountant and cannot imagine to look for an other accountant to to sort out this one question. I am aware of filing dates and I file everything online,and as I remember last year I received assessment through email or ros. All my calculations so far have been correct on income tax and penalty unfortunately we received not because of late filing, there was problem with Ros (another person was filing so I don't know what happened there in reality).
Yes and 100% P/T of current year is very good idea. I guess there is no guidance on calculation of P/T in transition period?:cool:

labradoodlelady

I presume it's just for interest you want to know the calculation for P/T 2011. Being totally honest, I wouldn't waste your time. It will be out of date anyway. But, here it is is short, it's complicated to explain in detail particularly with different categories of income but look on the revenue website if you need more detail.

Extract Income tax (tax only) liability for 2010. Calculate PRSI and USC on 2010 income using the 2011 rates. Add this to income tax. That's your liability.