What is preliminary tax ?
What is preliminary tax?
Preliminary Tax is your estimate of tax and related charges payable by you for a tax year and must be paid by 31 October in the year in question.
Preliminary tax applies only to self-assessed or self employed persons.
To avoid interest charges, the amount of preliminary tax paid for a tax year must be equal to or exceed the lower of:
- 90% of your final liability for the tax year, or
- 100% of your final liability for the previous tax year, or
- 105% of your final liability for the pre-preceding tax year. (This option is only available where preliminary tax is paid by direct debit and does not apply where the tax payable for the pre-preceding year was nil).
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