Article:

Provisional Tax Reminder - 15 January 2016

15 December 2015

The second instalment of 2016 provisional tax for March balance dates is due on 15
January 2016.
 

The calculation of the second instalment is usually based on an uplift of your previous year’s tax liability.  However if your final tax liability for 2016 is higher than the uplift amount you may be exposed to use of money interest (UOMI) which is currently imposed at rate of 9.21%.

UOMI is calculated on underpayment of provisional tax when the P1 and P2 instalments are compared to two thirds of your final tax liability for 2016.

At a practical level the 15 January 2016 date can be a difficult date for taxpayers given it falls at the heart of the main holiday season. 

If it is difficult to meet the P2 payment from a cash flow perspective then alternative means of funding your provisional tax obligations through the various “Tax Pooling” options should be explored.

Please contact your BDO adviser to discuss your provisional tax options.