Please help me understand my tax bill!

[Pebblesthepug74]

My head is fried and I am trying to work out roughly how much tax I will owe next Jan 2026.
So I run a small business as a sole trader and have just paid a tax bill of a few thousand. I also had to pay on account for the next tax year and will have to do so again in July. Theoretically does this mean that by Jan 26 half of the tax bill will already be paid? I understand if profit is larger I will pay the difference too. I expect it to be.
I can't decide whether it means things will be easier next year or worse?
Any help appreciated!

You’ll then have to pay in advance again next year so you’ll only really recoup or see the financial benefit if you were to end the business as then you’d have already paid a portion of the tax due

If you made exactly the same profit (and other income and tax & NI bands and rates remained the same) then you would have paid all of the 2024/25 tax via the 2 payments on account (Jan & Jul 25).

But you would also have a 2025/26 payments on account to make in Jan & Jul 26.

Etc.

Assuming your tax liability is the same for 2024/25 you will have paid full amount and then will just have first payment on account left next Jan.
For example, if your tax bill was £2k + £1k first payment on account now + £1 second POA in July.. totalling £2k already paid. If all things remain equal you will then end up paying £1k on account every Jan and July.

Thank you it is as I thought!

What my DH did was to set up a direct debit each month so that the payment in July was covered and the January payment, plus payment on account was partially paid, easy to sort out in your online SA account. That way he didn’t get a large bill along with paying for Christmas. Yes, you are correct, your January payment will be what you owe, plus payment on account estimated on figures of your profit for the year just gone.