A: Preliminary tax is an advance payment of tax that you need to make when filing your income tax return. Essentially you make a payment on account with Revenue for the following year. For example when filing your 2013 income tax return you pay the balance of 2013 tax and also make a payment on account for 2014.
This payment on account can be calculated in 3 ways:
- Based upon 100% of your 2013 tax charge.
- Based upon 90% of your estimated 2014 tax charge.
- 105% of your final tax charge for the pre-preceding tax year (2012). This option is only available where preliminary tax is paid by direct debit.
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