Payments on Account crop up and are calculated within one’s Self Assessment (otherwise known as a Personal Tax Return). Payments on Account are advanced payments towards your personal tax liability for the following tax year and at times, Directors of Limited Companies are required to make these payments.
A Self-assessment form ultimately details the calculation of one’s own taxable liability, otherwise known as a Personal Tax Return. If you are a company director you are required by law to complete and submit a self-assessment annually to HMRC stating your income, capital gains and any tax allowances or reliefs, i.e. expenses.
Up until less than a decade ago, permanent roles were arguably the most prominent way of working. However, contracting roles are becoming ever more popular and there are now estimated to be 600,000 contractors (operating via a limited company) in the UK.