AITI Chartered Tax Adviser

What is the preliminary tax?

If you are self-employed, or in receipt of rental or investment income, you must pay preliminary income tax on or before 31 October in the tax year. To avoid interest, the preliminary tax payment must amount to not less than:

(a) 90% of your ultimate tax liability for the tax year,
(b) 100% of your liability for the preceding tax year, or
(c) if you pay by direct debit instalment, 105% of your liability for the pre-preceding tax year.
You must pay the balance of your tax liability on or before the return filing date for the tax year, i.e., 31 October in the following tax year.

In deciding whether a preliminary tax payment meets the percentage requirement, EIIS relief or film relief given is not taken into account.