Tax planning, before the year ends.
Most tax planning is not about clever structures, it is about timing. When a cost is incurred, when a dividend is paid, when a pension contribution clears, when a director becomes a shareholder. The decisions that move the numbers are almost always calendar decisions made with enough notice.
Year-end timing
What can still be done before the accounting year closes, and what needs to wait for the next one. The shortlist is shorter than it looks.
Jump to section 02Capital spend
Full Expensing, AIA and the timing of plant and machinery purchases. One invoice date can move six-figure deductions across years.
Jump to section 03Extraction planning
Salary, dividend, pension and bonus. The mix is individual; the optimisation window is annual.
Jump to section 04Structural planning
When incorporation saves tax, when it does not, and when a group structure does real work beyond the tax saving.
Jump to sectionYear-end planning: what needs to happen before the deadline.
A company's accounting year end is a hard deadline. Costs accrued before the date reduce the current year's tax; costs accrued after it do not. A handful of decisions have to be made and actioned inside the window, and the most common mistake is leaving them to the final two weeks. By then, most of the useful moves, pension contributions that take days to clear, asset purchases that need time to order and install, salary-dividend rebalances that need a board minute, are already out of reach.
A proper year-end review starts about 90 days before the date. It covers the projected profit, the capital position, the extraction position, the pension position, and any loss or relief that needs to be used or forfeited. The output is a short action list, five to eight items, with dated decisions and the name of who owns each one.
Capital spend: Full Expensing, AIA and the timing effect.
Full Expensing gives companies a 100% first-year deduction on qualifying new plant and machinery with no upper limit. The Annual Investment Allowance gives a 100% first-year deduction on qualifying plant and machinery (new or used) up to £1 million a year. Between them, they make the accounting year in which an asset is purchased the year that matters, not the year it is paid for, financed or fully used.
The timing question is simple and high-value: should a planned purchase be made before year-end or after. A £60,000 asset brought into use one day before year-end reduces the current year's CT by up to £15,000 (at 25%). The same asset brought in one day after moves the deduction to the following year. The decision to buy is commercial; the decision to time it is almost always a tax decision.
Extraction planning: salary, dividend, pension, bonus.
Extraction planning is the annual decision about how to move money from the company to the owner. Each route has its own rate, its own relief, and its own non-tax consequences. A small salary preserves state pension entitlement. A pension contribution is corporation-tax-deductible and grows outside the estate. A dividend is NIC-free but only possible if reserves are there and legally distributable. A bonus is CT-deductible but attracts employer NIC.
There is no single right answer. The right mix depends on the director's other income, the company's retained earnings, the personal allowance position, the state pension horizon, and the appetite for locking income into a pension. What is consistent across every owner-managed company is that the mix is worth reviewing every year, and the review works best before the year-end.
Structural planning: incorporation, groups, and long-horizon decisions.
Structural decisions have longer lead times and bigger consequences than year-end moves. Whether a sole trade should incorporate. Whether a property portfolio should sit inside a limited company or outside. Whether two trading companies should sit under a holding company. These are decisions that compound over years, and the right moment to make them is usually earlier than it feels.
The honest test on any structural change is not "does it save tax this year" but "does it still make sense if the legislation moves". A structure that only works under one specific threshold, one specific rate, or one specific relief is a fragile structure. A structure that is supported by the commercial logic of the business, and happens to be tax-efficient, survives Budget changes intact.
Go Deeper
Capital Spend Timing: Accelerate, Defer, or Wait?
How timing capital spending can affect Corporation Tax, including Annual Investment Allowance, full expensing and year-end cut-off points.
GuideDividend vs Bonus: Which Extracts Profit More Efficiently?
The arithmetic on bonus vs dividend for an owner-managed company. Corporation Tax relief, employer NIC, personal tax bands, and when one genuinely beats the other.
GuidePension Contributions Timing: Year-End Rules for Companies
How timing employer pension contributions can affect Corporation Tax, cash flow and year-end planning for company directors.
GuideWhen to Incorporate a Sole Trader Business
When incorporation may help a sole trader, including profit level, National Insurance, retained profits, admin costs and timing.
GuideYear-End Tax Planning: The 90-Day Company Checklist
Year-end tax planning for UK companies, including director pay, pensions, capital spending, Corporation Tax bands and accounting cut-off points.
Related Tools & Services
Year-end approaching?
We run a tax planning review 90 days before the year end, the projected profit, the capital and extraction positions, and a short action list of decisions that must happen before the date. Everything in one document, commercial-first.
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