Preliminary Tax

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Income Tax & Preliminary Tax

Should I be Income Tax Registered?

You should register for Income Tax if;

  • You are self-employed
  • In receipt of additional income outside of PAYE, exceeding €5,000
What is Preliminary Tax and do I have to pay it?

Preliminary Tax is an estimate of the income tax due for a tax year. This is paid in advance of filing your income tax return for that year. This is due by 31st October of that tax year.

Preliminary Tax due is;

  • 90% of the tax due for that year
  • 100% of the tax due for the previous tax year
  • 105% of the tax due for the tax year preceding the previous year but only applicable if currently paying by direct debit.

For example, Preliminary Tax due for the year 2020 is due to be paid by 31st October 2020. This can be submitted when filing your 2019 Income Tax Return. Underpayment or late payments of Preliminary Tax may be charged interest for each day past the deadline.

Pay and File System – how does this work?

By the 31st October each year, you must;

  • Pay your Preliminary Tax for that year i.e 2020
  • File your Tax Return for the previous year i.e 2019
  • Pay any balance of tax due for the previous year i.e 2019

The pay and file deadline is extended into November for returns filed online through Revenue Online Services (ROS). Late filing of tax returns will incur surcharges of 5% of tax due within 2 months of filing or 10% of tax due thereafter.

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Pay & File Deadline Extension for Self-Assessed

The deadline for all self-assessed individuals to file their Form 11 tax return & submit payment has been extended, Revenue have announced.

Clients that file their 2019 Form 11 return and pay the following;

  • Preliminary Tax due for 2020
  • Income Tax Balance for 2019

Will qualify for the extended due date of Thursday, 12th November 2020.

As with every year, as it is an extremely busy period, we would advise all our clients that in order to give enough time to review your tax year and to submit it on time, paperwork must be submitted as soon as possible for 2019.

Your tax return can be filed at any time between now and the deadline.

Here are 5 reasons why you should file your Tax Return early this year…

  1. Plan Ahead

If you file your return and are due to pay a liability, this is due by 31st October (or the extension deadline as per above). Therefore, if you’re liability is calculated in advance, it gives you time to prepare and budget.

  1. Less Stress

Submitting your paperwork to your accountant early means there is less pressure on both sides to complete and file your return on time. Giving your accountant more time to prepare and review your return. If your paperwork is received late or too near the deadline, your accountant may not be able to guarantee filing it on time.

  1. Avoid Surcharges

If your return is filed after the deadline of 31st October (or the extension deadline as per above), you will be subject to surcharges and interest owed. You also run a higher risk of being selected for an audit.

  1. More efficient

The longer you leave your return nearer the deadline, the busier Revenue will be. If you are due a refund, the sooner you apply for this the better as you may need to wait a lot longer once we approach 31st October deadline due to the volumes of returns Revenue need to process.

  1. Peace of mind

Being more organised and submitting your return early, gives you that peace of mind that you have completed your tax obligations and won’t have that rush in October.

Contact us today to begin preparing your 2019 return on 01 539 7999 or info@itasaccounting.ie

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Extension of Pay & File Deadline for Self-Assessed

Revenue have confirmed they have extended the Pay & File Deadline to Tuesday 12th November for all self-assessed individuals. In order to qualify for this extension, you must pay and file through ROS.

The individual must;

  • Pay Preliminary Tax due for 2019
  • Pay Income Tax Balance for 2018

This extension also applies for beneficiaries who have received gifts and inheritances with valuation dates in the year ended 31st August 2019. The Capital Acquisition return and payment must be paid through ROS to qualify.

As with every year, as it is an extremely busy period, we would advise all our clients that in order to give enough time to review your tax year and to submit it, paperwork must be submitted as soon as possible for 2018

Have a query? Contact us on 01 539 7999

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