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. Check the contractual payment obligation and any special timing rules before claiming.
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 year-end review checks when income and expenses belong in the accounts and when tax relief is available. Accruing an expense does not always secure an immediate deduction: employer pension contributions normally need to be paid, and unpaid remuneration has a separate nine-month rule. Capital allowances follow their own expenditure timing and eligibility conditions.
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 can give a 100% first-year deduction for qualifying new and unused main-rate plant and machinery acquired by a company. The Annual Investment Allowance can give a 100% deduction for qualifying plant and machinery, new or used, within the available annual limit. Cars and other exclusions must be checked. For an outright purchase, expenditure is generally incurred when the obligation to pay becomes unconditional, subject to special rules; hire purchase has different conditions.
Check a planned purchase against its commercial purpose and the relief actually available. A £60,000 deduction saves £15,000 if every pound would otherwise face 25% Corporation Tax. The saving can differ in the small-profits or Marginal Relief bands. Delivery, the payment obligation, hire-purchase use and short accounting periods can change the result; an invoice date alone is not enough.
Extraction planning: salary, dividend, pension, bonus.
Compare salary, dividends, bonuses and pension contributions against the company and personal tax position. Salary may support a National Insurance record; dividends do not. Qualifying employer pension contributions can reduce company profit but restrict access to the money. From 6 April 2027, most unused pension funds and pension death benefits are due to enter the Inheritance Tax estate, so permanent estate exclusion should not be assumed.
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
When to Incorporate a Sole Trader Business
When incorporation may help a sole trader, including profit level, National Insurance, retained profits, admin costs and timing.
GuideCapital 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.
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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