Dáil Éireann díospóireacht -
Wednesday, 3 Nov 1999

Vol. 510 No. 1

Written Answers. - Tax Code.

Nora Owen

Ceist:

106 Mrs. Owen asked the Minister for Finance if he will re-examine the method of payment of tax for self-employed people whose spouses are PAYE workers and where there is joint assessment in view of the fact that preliminary payment of tax for these persons means that, in spite of the PAYE workers' tax being deducted, the self-employed persons must calculate the tax due by their spouses and include it in their preliminary tax return; and if he will make a statement on the matter. [21972/99]

Minister for Finance (Mr. McCreevy)

Preliminary tax is an estimate of a self-employed individual's net income tax liability, for the year of assessment. The minimum amount of tax which must be paid to avoid a charge to interest is the lower of: 90 per cent of the final liability to tax for the actual year of assessment; 100 per cent of the final liability to tax for the previous year of assessment; and 105 per cent of the final liability to tax for the pre-preceding year of assessment where preliminary tax is paid through the direct debit scheme.

Where a married couple are jointly assessed the estimate is based on their joint incomes.

Where there is income which has been subject to deduction of tax under the PAYE system this income must be included in the calculation. However, credit is given for the tax deducted under PAYE in this calculation. The net effect, is that preliminary tax is not calculated on PAYE income but on the other income.

Preliminary tax 1999/2000

Liability 1998/99 before credit for PAYE tax	6,500
Credit for PAYE tax deducted	1,000
Net income tax liability	5,500
Preliminary tax 1999-2000(if based on 100 per cent of final liability for 1998/99)	5,500

Preliminary tax for the year 1999/2000 was due on 1 November 1999. As a reminder for taxpayers and their agents preliminary tax letters have been issued.

I am satisfied the arrangements for the calculation of preliminary tax are fair and reasonable.