There’s still time to take control of your year-end tax planning
With the tax and financial year end fast approaching on 5 April 2026, now is the moment to make sure you are not leaving money on the table. A little planning now can make a real difference to your tax position, your cash flow, and your longer-term financial security.
At A&C Chartered Accountants, we help start-ups, owner-managers and small businesses make smart, timely decisions so you keep more of what you earn. Below are the key areas to consider before the year end.
Savings – making your money work harder
If you have spare cash, one of the simplest and most effective moves is to use your ISA allowance.
For 2025/26, you can invest up to £20,000 per person in ISAs, sheltering that money from income tax and capital gains tax.
If you are aged between 18 and 39, a Lifetime ISA could also be worth considering. You can contribute up to £4,000 per year, and the government adds a 25% bonus, up to £1,000 annually. This can be used towards your first home or for retirement. It is important to note that the Lifetime ISA limit sits within your overall £20,000 ISA allowance.
We can help you decide which option makes most sense for your goals.
Pension planning – one of the most powerful tax tools available
If you can, increasing your pension contributions before 5 April 2026 is often a very tax-efficient move.
At a basic level, for every £4,000 you contribute to a personal pension, the government tops this up to £5,000 through basic rate tax relief.
If you pay higher rate tax, you can claim an additional £1,000 in your tax return, reducing the real cost of that £5,000 contribution to £3,000.
Pensions become even more valuable if your income sits between £100,000 and £125,140. In this band, your personal allowance is gradually withdrawn, which can result in an effective 60% marginal tax rate. Making pension contributions can reduce your taxable income and help you avoid or reduce this charge.
There are annual limits on how much you can contribute tax efficiently, and timing matters. A&C Chartered Accountants can review your position and help you get this right.
Dividends and company loans – act before rates rise
From 6 April 2026, dividend tax rates are increasing by two percentage points.
This means:
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Basic rate dividends will rise from 8.75% to 10.75%
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Higher rate dividends will rise from 33.75% to 35.75%
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The additional rate will remain at 39.35%
The higher rate increase will also apply to the ‘penalty tax’ charged on certain company loans to shareholders made on or after 6 April 2026.
If you are a company director or shareholder, it is worth reviewing the timing of dividends and any planned company loans before the year end to benefit from the lower 2025/26 rates where appropriate.
We can model the numbers for you and recommend the most tax-efficient approach.
Capital allowances – timing your business investment
If your business has a year end of 31 March or 5 April, the tax year end is especially important for capital allowances.
To qualify for allowances in your current period, assets must be purchased and brought into use before your accounting year end.
Key points to know:
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The Annual Investment Allowance (AIA) lets both companies and sole traders write off 100% of the first £1 million spent on qualifying plant and machinery in a 12-month period. This excludes cars, although new zero-emission cars can qualify for 100% relief.
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Limited companies can also benefit from “full expensing” on most new (not second-hand) equipment, with no overall spending cap.
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From 1 January 2026, a new 40% first-year allowance is available on certain qualifying assets, which may be particularly useful for unincorporated businesses that have already used their full £1 million AIA.
If you are buying equipment on hire purchase, you can still claim allowances on the full cost of the asset, provided it is in use by your year end.
Getting the timing right can make a big difference to your tax bill, and we can help you plan this properly.
Capital Gains Tax – use your allowance while you can
Everyone has a £3,000 Capital Gains Tax annual exemption for 2025/26. If you have not used it, you may want to consider realising gains before 6 April 2026.
There are also further increases coming to the rates for Business Asset Disposal Relief (BADR) and Investors’ Relief. These rose from 10% to 14% in April 2025 and will increase again to 18% from 6 April 2026.
If you are planning a qualifying disposal, bringing this forward could save you tax.
Voluntary National Insurance – protecting your state pension
To receive the full new State Pension, you generally need 35 qualifying years of National Insurance Contributions.
If you have gaps in your record, you can usually fill these by paying Class 3 voluntary NICs at £17.75 per week (£18.40 in 2026/27).
You can normally only make payments for the previous six tax years, which means gaps for 2019/20 must usually be filled by 5 April 2026.
If you are unsure about your record, we can help you check whether topping up makes financial sense for you.
Next steps
Year-end tax planning is not about rushing into decisions – it is about making informed, well-timed choices that suit your circumstances.
If any of the points above apply to you, speak to A&C Chartered Accountants before taking action. We will look at your situation in the round and help you make the most of the opportunities available before the year end.