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How to build a small business tax pot

A tax pot is money you set aside for future tax bills so the cash is not accidentally treated as spendable business income. The right amount depends on profit, business structure, other income, VAT, PAYE, payments on account and personal circumstances. Use HMRC guidance, accountant advice or tax tools for actual calculations, but use a regular habit to keep the money visible. A non-advice habit guide for setting aside tax money without pretending one percentage works for every business.

Key takeaways

• A tax pot is a cash discipline habit, not a tax calculation.
• Profit matters more than turnover when estimating many tax bills.
• Payments on account can change how much cash is needed at deadlines.
• Monthly reviews make the tax pot less emotional and more realistic.

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