Should I be using “cash basis” for my sole trader business?

The cash basis is where you declare income and expenditure based upon what’s actually been paid during the year, so it’s HMRC’s way of simplifying the process and making it a little bit easier for your self-assessment tax return to be completed.

Self-employed: Payment on Account

Effectively, a payment on account is an advance payment of tax and Class 4 National Insurance towards your tax bill before your self-assessment tax return has been submitted.