Johnny62

I am self employed and my accountant has filed my tax return for 2023/24. Due to making a large purchase which allowed for the Annual Investment Allowance to be used that brought my taxable profits for the year to just over £9,500. This subsequently meant that I had no tax liability for 2023/24 and I received a tax repayment for the payment on account that I made in January 2024. Is the figure of £9,500 what I would use when I receive my renewal pack for working tax credit? I obtained a loan for the purchase which obviously has to be paid back over a period of time, however I didn’t actually suffer any financial hardship and I can’t find a definitive answer anywhere as to whether I would be entitled or not. I don’t want to make a claim and receive payments if I’m not actually entitled to do so. Can you please advise on what I should do. Thanks 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.

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.