Payment on Account: The Hidden Tax Trap for UK Drone Businesses

A drone pilot called me recently for help with his Self-Assessment.

He was proud of what he’d achieved that year — £50,000 in profit — and confident he’d set aside enough to cover his tax bill.

But by the end of the call, he was questioning how the system could possibly be so unfair.

He’d done everything right. Saved around 25% for his tax bill, kept his records tidy and stayed organised.

The only problem was that HMRC didn’t just want the £10,500 tax for this year. They also wanted another 50% upfront as a payment toward next year. That extra £5,250 came as a complete shock.

Many drone pilots are passionate about their craft. They love flying their drones and capturing stunning aerial footage, but they may not have the same enthusiasm for bookkeeping and tax planning. As a result, they can find themselves unprepared when tax season rolls around.

To make matters worse, the nature of drone work means income can fluctuate significantly. One month might bring in a hefty paycheck, while the next could be quiet. This inconsistency makes it challenging to set aside enough money for taxes. When the tax bill arrives, it can feel overwhelming, especially if they haven’t been saving throughout the year.

The story of my friend made me realise how many small business owners, especially drone pilots, don’t find out about Payment on Account until it’s already too late.

If you run a drone business in the UK, this is one of the most common (and frustrating) tax traps you’ll face.

In this article, we’ll break down what payments on account actually mean, why they hit drone operators harder than most, and what you can do to stop them from wrecking your cash flow.

What Payment on Account Actually Means

Let’s get this out of the way first.

When you submit your self-assessment tax return, HMRC looks at your tax bill and assumes you’ll earn roughly the same next year. Instead of waiting 12 months for that tax, they make you pay some of it upfront — in advance.

For example, if your tax bill for 2024/25 is £4,000, HMRC will expect:

• £4,000 now (what you owe), plus

• 50% (£2,000) as an advance toward next year

That’s a total of £6,000, split into two instalments — one by 31 January and the other by 31 July.

On paper, it’s a system meant to keep you on top of your tax. In reality, it often feels like paying for a meal you haven’t even eaten yet.

For someone with stable monthly income, that might not be a problem. But for drone operators, where income jumps around with weather, demand, and project timing , it can throw your finances completely off balance.

Why Seasonal Businesses Feel It the Most

Running a drone business is nothing like a 9-to-5. One month you’re flying high with survey contracts and property shoots. The next, it’s raining for two weeks straight and your inbox is quiet.

But HMRC doesn’t see any of that. They just see your total profit for the year and assume every month looks like your best one.

According to the latest data from HMRC, over 4.5 million self-employed people in the UK face irregular income flows — and seasonal operators like drone pilots are among those hit hardest by advance tax.

Here’s why:

• Clients often take 60–90 days to pay invoices.

• Equipment upgrades, insurance renewals, and subscriptions all fall in the same months you’re slow to get paid.

• Work depends heavily on weather and daylight hours.

So if you had an amazing summer, your tax bill — and therefore your Payment on Account — will reflect that success. Even if your winter income drops to half, HMRC still expects you to pay like it’s July every month of the year.

That’s how people end up “successful on paper” but short of cash when they need it most.

But the problem isn’t just the size of the bill, it’s when it arrives.

The first payment is due by the end of January, right after Christmas, when cash flow is tight and the weather’s usually keeping you grounded unless you have in-door work opportunities.

Then the second one lands in July, when you’re finally getting busy again and catching up on equipment renewals, insurance, and everything else that drains your summer profits.

The system doesn’t care about timing. It doesn’t care that you’re waiting for a big invoice to clear or that you’ve had a slow start to the year. It just wants its money, and it wants it early.

That’s what makes it so brutal.

How to Protect Your Cash Flow

Here’s the good news: you can absolutely plan for it. The key is awareness and simple habits.

1. Check your tax calculation. Ask your accountant to complete your tax return as soon as possible after the end of the tax year in April. This will give you enough time to see what the tax bill is and to plan accordingly.

   
   

2. Build a buffer. During the year, set aside around 25–30% of every payment you receive into a separate bank account. That money is for tax, not for new equipment or a holiday. Keep that tax money in a savings pot or an ISA until it's time to pay the tax.

   
   

3. If your income drops, act early. You can ask HMRC to reduce your Payment on Account if you’re expecting to earn less next year. Don’t wait until it becomes a problem.

   
   

4. Get advice from someone who understands your type of work. Drone business accounting in the UK is unique. Seasonal income, project costs, unpredictable weather. You need someone who gets that and plans around it.

What Not to Do

Most of the damage caused by payments on account doesn’t come from the rule itself, it comes from panic and poor planning.

Here’s what not to do:

• Waiting until the end of the year to find out how much tax you owe

• Spending money that should have been set aside for tax.

• Forgetting that you need to set money aside for payment on account on top of your normal tax bill.

If you do those things, January will keep being a nightmare.

Back in that café, my mate finished his espresso looking a bit calmer. He still had a hefty bill to pay, but now he understood why it happened, and that made all the difference.

That’s really the point.

The danger isn’t the tax bill itself; it’s the shock of being blindsided by a rule no one told you about.

If you plan ahead, build a buffer, and check your figures regularly, payments on account won’t catch you off guard again.

Because the only thing worse than paying tax is paying it twice when you didn’t see it coming.

If you’re running a drone operation in the UK and you want to understand how to budget for tax, plan your cash flow, or reduce your payment on account when income dips — get in touch.

Book a free 30-minute consultation

At theFlyingAccountant, I help drone pilots and creative business owners stay one step ahead of HMRC so they can focus on what they do best: flying, creating, and building something sustainable.

And if you want to learn 3 tax-saving tips to get your next camera for free, click on the image below to find out more!