WEEK 3 – Helpful Hint: Check If You Need Payments on Account (And Why It’s Best to Let a Professional Handle It)

Payments on Account are one of the most confusing areas of Self Assessment — and January is when many sole traders discover they owe more than expected.

This can cause shock, frustration, and cash-flow issues… especially if your income changed during the year.

The truth is, many mistakes happen when people try to work this out themselves, and HMRC doesn’t make it easy. That’s why having an accountant handle your return is far safer and more accurate.

This Week’s Helpful Hint: Find Out Whether Payments on Account Apply to You

Payments on Account are advance payments towards next year’s tax bill.
You may need to make them if:

• Your last tax bill was over £1,000
• Less than 80% of your tax was collected through PAYE

But here’s the problem:

❗ Many sole traders either

• Pay too much because they don’t know they can reduce it,
  or
• Don’t pay enough and get hit with penalties later.

Without proper calculation, it’s easy to get this wrong.

Why You Shouldn’t Try to Work This Out Yourself

Payments on Account aren’t straightforward — they involve forecasting, comparing income levels, and understanding HMRC rules.
A small mistake can lead to:

• Overpaying by hundreds
• Underpaying and triggering penalties
• Cash-flow issues
• Incorrect future projections
• Stress and confusion during an already busy month

Most sole traders simply don’t have the time or the desire to deal with this.

Why Letting Us Do It Is the Best Option

When we complete your tax return, we will:

✔ Check if Payments on Account apply

✔ Accurately calculate what you should pay

✔ Reduce them if your income has dropped

✔ Prevent accidental overpayments

✔ Make sure you don’t get unnecessary penalties

✔ Give you a clear breakdown of what to expect this year and next

This gives you complete peace of mind and ensures you only pay what you actually owe — not a penny more.

January Is Not the Time for Guesswork

The deadline is close, and the last thing you want is:

• A surprise bill
• A miscalculated payment
• A long call with HMRC
• Stress at the end of the month

Let us handle the complicated parts so you can stay focused on your business.

👉 If you’re unsure whether Payments on Account apply to you — or you want your return completed correctly and on time — We are here to help.
Send us a message today and we’ll take care of the entire process for you.