End of Tax-Year Planning

As the end of the calendar year approaches, it’s easy to think tax planning can wait until the spring. But by November, you’re already halfway through the 2025/26 tax year and that means there’s still plenty of time to make meaningful adjustments before 5 April 2026.

Whether you’re a small business owner, company director, or family-run firm, the months leading up to Christmas are a golden opportunity to review your finances, make strategic decisions, and avoid a last-minute rush.

Why Plan Now?

Leaving tax planning until February or March often limits your options. Acting early gives you time to:

• Maximise allowances and reliefs before they reset in April.
  
• Spread out cashflow for pension or ISA contributions.
  
• Avoid year-end stress by addressing paperwork and planning discussions before the busy season.
  
• React to policy changes that may come from the Autumn Budget on 26 November 2025, which could affect tax bands, dividend rates, or business reliefs.
  

In short, planning in November means you can make decisions on your own terms — not HMRC’s deadlines.

For Business Owners and Directors

1. Review How You Extract Profits

The balance between salary and dividends can affect how much tax you pay. With potential changes on the horizon, it’s worth reviewing your structure now.
Check if you’re making full use of the £1,000 dividend allowance and whether additional contributions (such as pension payments) could be more tax-efficient.

2. Use the £1 Million Annual Investment Allowance (AIA)

If you’re planning to buy new equipment, vehicles, or technology, making the purchase before your accounting year-end may allow you to deduct the full cost.
November is a good time to forecast year-end profits and decide whether to accelerate or delay investment.

3. Optimise Director Loan Accounts

If you’ve taken a director’s loan, remember to repay or clear it within nine months of your year-end to avoid the s.455 Corporation Tax charge.
Alternatively, if the company owes you money, you may be able to withdraw it tax-free.

4. Plan for Staff Bonuses or Benefits

Budgeting for staff bonuses before year-end can improve morale and may offer corporation tax deductions — but timing is key.
Similarly, review benefits-in-kind and ensure they’re recorded correctly to avoid unexpected P11D liabilities.

For Individuals and Families

1. Maximise ISA Allowances

Each adult can save up to £20,000 per year in an ISA, tax-free. Spreading contributions across the year, starting now makes it easier to hit that target before April.

2. Boost Your Pension

You can contribute up to £60,000 per year (subject to your earnings and any tapering rules).
Contributions made before 5 April 2026 attract tax relief and can help manage income levels for personal tax thresholds.

3. Consider Gifting and Inheritance Tax (IHT) Reliefs

Use your £3,000 annual gift allowance, plus the ability to carry forward unused allowance from the previous year. Regular gifts from income can also be exempt — a great way to support family without increasing your estate’s future IHT liability.

4. Review Capital Gains

The Capital Gains Tax (CGT) annual exemption remains low at £3,000. If you’re planning to sell shares, cryptoassets, or property, consider spreading disposals across tax years to make the most of available allowances.

For Landlords and Property Investors

• Check your mortgage interest relief and property expense claims are being fully captured.
  
• Review ownership structure — joint ownership or incorporation may provide tax advantages depending on your situation.
  
• Plan ahead for repairs or upgrades before year-end, especially those that could qualify as deductible expenses.
  

Plan Early, Save More

End-of-tax-year planning isn’t just about saving tax, it’s about building financial flexibility. By starting in November, you can:

• Avoid rushed decisions in March.
  
• Adjust to any post-Budget tax changes calmly.
  
• Spread contributions and cash outflows sensibly.
  
• Get ahead on documentation and filing.
  

Good tax planning isn’t a once-a-year scramble, it’s a year-round habit. By taking action now, you can finish 2025 with confidence, clarity, and a plan that works for you and your business.