Sole trader planning ― payments on account

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Sole trader planning ― payments on account

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

This guidance note discusses some of the planning points that can arise around payments on account.

Payments on account are essentially a part of the compliance process. However, it can be a very good time to put forward certain simple planning points. It is a natural time to communicate with clients, and they will be particularly focused on tax issues given that they have an impending payment.

Aside from talking to clients about payments on account, it is a good time to conduct a review of future profits of the trade. Other points can also be considered, such as pension contributions, business expenditure, deferring income and so on.

Often the challenge is persuading clients to think further ahead and payments on account are useful for this because the amounts due can be calculated quite far ahead.

Calculating payments on account

Cash flow can be a key consideration for sole traders. How sole traders account for their tax liabilities varies from client to client. Some sole traders will set aside money well in advance,

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 12 Nov 2025 13:40

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Advising sole traders

Popular Articles

Owner-Managed Businesses

Tax implications of administration and liquidation

Tax implications of administration and liquidationThis guidance considers the tax implications of a company going into administration or liquidation.Introduction to company administration and liquidationCompany going into administrationA company which is in financial difficulty may go into

14 Jul 2020 15:29 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Bare trusts ― income tax and CGT

Bare trusts ― income tax and CGTThis guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax

14 Jul 2020 15:34 | Produced by Tolley Read more Read more