Balancing payment

I’m a sole trader and will be making a purchase of equipment during this financial year 2023/24. The cost of the equipment will take my profits below the tax threshold, meaning that I won’t have any tax liability for 2023/24. In tax year 2024/25 my profit should return to normal meaning that I would have tax liability. My question is, how would my tax calculation be done. Would I just have 2 payments on account to make or would there be any kind of balancing payment due. For example: 2024/25 tax due £4,000 = 2 payments on account of £2,000. Would that be all that needed to be paid.

Hi
If you have no tax liability for 23/24, no payments on account will be generated for 24/25 and any tax to pay would then be a balancing payment to be paid in January 2026.
As you expect to have liability you can always make payments in advance.

Thank you for your reply. So, just to clarify, if I have no payments on account for 24/25 but my tax bill for that year is say £5,000 would that mean that in January 2026 I would have a balancing payment of £5,000 and then two payments on account of £2,500 each. Do the payments on account I make in 23/24 then go towards my tax bill for 25/26. I would like to complete my own self assessment going forward and am just trying to clarify this point to hopefully avoid any mistakes I might make.

Hi,