Personal Tax

Estimating your personal tax payable

If you'd like an estimate of your tax payable on your partnership earnings for the 2023-24 tax year you can use the same template as sole traders here.

If you'd like an estimate of your tax payable on your partnership earnings for the 2022-23 tax year you can use the same template as sole traders here.

If you'd like an estimate of your tax payable on your partnership earnings for the 2021-22 tax year you can use the same template as sole traders here.

However please note that this is only an estimate and does not take account of any other taxable income which you might have.

Paying your personal tax

Each individual partner is responsible for calculating their own tax liability and paying any tax monies due so the Revenue will come after you, not the partnership, if you don’t pay your tax.

It would probably make sense to ensure that each individual partner has their own tax provision and this is something that can be detailed in the partnership agreement.

Payments on account of income tax and Class 4 National Insurance are normally due on 31 January and 31 July each year.

Each payment is one-half of your total estimated tax liability for the current tax year (less any tax paid at source eg on bank interest).

So, let’s assume that you have been a partner in the business for a number of years. The payments you make on account on 31 January 2025 and 31 July 2025 (for your 2024/25 tax liability) will be based on your tax liability for the year to 5 April 2024 (2023/24).

If you have either under-paid or over-paid your 2024/25 tax and Class 4 NI, then this will be adjusted for in your 31 January 2026 tax payment.

Let’s look at an example:

Let’s assume you had made payments on account of your 2024/25 tax bill of £4,000 but your actual tax bill turns out to be £4,500.

On 31 January 2025 you will make a payment of £2,750:

This is £500 additional tax for 2024/25 (you paid £4,000 but your actual bill is £4,500)

plus

£2,250 payment on account for tax year 2025/26 (half of your actual 2024/25 tax liability of £4,500 which forms the basis of your initial 2024/25 tax payments on account).

On 31 July 2026 you will make a second payment on account of £2,250 (half of your actual 2024/25 tax bill).

When your final 2025/26 tax bill is calculated, you may have an under/over payment which will be adjusted in the payment collected on 31 January 2027.

In summary, if you were filing a 2025 Tax Return you would pay the balance of any 2024/25 tax and Class 4 National Insurance due on 31 January 2026 and your first 2025/26 payment on account (based on one half of your 2024/25 tax liability) at the same time.

Your second 2025/26 payment on account would be payable on the 31 July 2026 and the balance of any 2025/26 tax would be payable on 31 January 2027 and so on.

Because this estimate is based on your previous year’s taxable income, it is important to understand whether the partnership's current year’s taxable profits are increasing or decreasing. If they are decreasing, it may be worth reducing your payments on account as you may end up overpaying your tax.

However, beware – if you reduce your payments on account and the final tax liability turns out to be higher than previously thought, HMRC will charge you interest on the additional tax which should have been paid on time. HMRC’s interest rates are quite high and this could cost you a pretty penny!

The balance of any tax due for the current year must also be paid by 28 February following the tax year concerned otherwise you will incur a 5% penalty on any tax for this year which is still outstanding.

For example if your 2024/25 tax bill is £5,000 and £2,000 is still outstanding on 28 February 2026 you will incur a penalty of £2,000 x 5% = £100 – this is on top of any interest you will also owe to the taxman for paying the tax late!