Last year the Revenue Commissioners collected £494 million (€628 million) in preliminary tax from self-assessed taxpayers, and this year they're back for more. The self-employed, company directors and people in receipt of non-PAYE income have less than a month to pay their tax bill on or before the November 1st.

So what is preliminary tax?

Preliminary tax is your estimate of your income tax liability for the tax year. The tax year is either the current year 2000/ 2001, last year 1999/2000 or the year before that 1998/1999, depending on how you chose to run your taxes. The amount of preliminary tax you must pay for any year is either 90 per cent of your final liability for the current year, 100 per cent of your liability for the previous tax year or 105 per cent of your final liability for the previous year, in this case 1998/ 1999.

If you are paying 105 per cent of your tax liability for 1998/ 1999, you will have authorised the Collector-General to collect the money by direct debit.

Don't forget that preliminary tax includes PRSI, health contribution and employment and training levy.

Who has to pay preliminary tax?

The self-assessment system covers the self-employed, or those who are in PAYE employment but have non-PAYE income exceeding £2,500. About 290,000 people, mainly those who carry out their own trades, including farming, professions or vocations, are in this category. People receiving rental income or investment income of any kind must pay preliminary tax. PAYE workers who have invested in tax schemes such as the Business Expansion Scheme, Section 481 film schemes or holiday homes are liable for preliminary tax.

What happens if you don't pay up by November 1st or don't pay enough?

There are interest charges for late payment and underpayment of tax. The rate of interest is 1.25 per cent per month or per part of a month until it is paid.

If you are not on the Revenue's records or if your circumstances change and you consider you have a liability for any tax year, it is your responsibility to pay preliminary tax for that year.

How are you notified of your obligation to pay preliminary tax?

If you are on the Revenue Commissioners' records as a liable taxpayer you will receive a notice of preliminary tax. This notice should have arrived in the last couple of weeks and sets out what your Inspector of Taxes considers to be your preliminary tax liability for the year.

If your circumstances have changed and you consider you have a liability, it is your obligation to notify the tax office and pay preliminary tax.

What if the notice of preliminary tax is too high or too low?

The notice is mainly a reminder of your obligation to calculate and pay preliminary tax. If it is too high or too low, all you need to do is substitute your own calculated tax liability. If you don't do so the Inspector's figure must be paid.

How do you pay?

It's straightforward, you either complete the preliminary tax payslip attached to the notice and send it in with your payment to the Collector General or you can use the bank giro form and pay it through any bank.