Partnership/Sole Trader tax and payments on account etc.

[Deleted User]

Can someone explain this to me?

Wife runs a small business and until April I was a partner, but then we converted it to sole trader in her name.

So, in tax year 2010/11, say, we earned £4000. Split 50/50 thats income of £2000 each. But, of course, HMRC wont know this until the tax return is done in Jan 2012.

How does HMRC collect the tax for this? Is this where payment on account comes into it? I can see that at this point the tax is already for the year 9 months previously but I understand that they then estimate tax for future years and add this tax in etc.

For my circumstance, could I just pay off my tax debt to April 2011 in one go? Probably only £400 to be honest.

Obviously, since personally my involvement ended there I'd rather not pay further estimated tax etc.