Your first January bill is 150 per cent of a year’s tax
Payments on Account Calculator
Work out what is due in January and July, and how much bigger the first one is. On £55,000 of profit that first bill is £17,683, not £11,789.
Payments on Account Calculator
January is the balancing payment for the year just gone plus the first payment on account for the year already running. In the first year that comes to 150 per cent of a year's tax.
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Three things worth knowing
Each payment on account is half of last year's liability, due 31 January and 31 July. Once it settles, a flat income means 50 per cent in January and 50 in July. It is the first year that comes to 150 per cent.
No payments on account if your liability is under £1,000, or if at least 80 per cent of your tax was collected at source.
The first year of self employment has nothing behind it, so the January after it carries a full year plus a half with no warning.
The same sum, in a workbook
With the monthly amount to set aside for both dates.
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