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+™
  • 03 Sep 2026 08:42

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

Popular Articles

Corporation Tax

Foreign exchange issues

Foreign exchange issuesOverview of foreign exchange provisionsForeign exchange (FX) movements are generally taxed following the rules applicable to the underlying income, expenditure, asset or liability on which they arise, broadly as follows:Capital assetsOn a realisation basis (ie on disposal)

14 Jul 2020 11:44 | Produced by Tolley Read more Read more
Corporation Tax

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more Read more
Value Added Tax

VAT registration ― artificial separation of business activities (disaggregation)

VAT registration ― artificial separation of business activities (disaggregation)This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK

14 Jul 2020 13:57 | Produced by Tolley Read more Read more