THERE’S STILL TIME FOR SOME YEAR-END TAX PLANNING

Think of this as a practical year-end checklist. If you can tick most of these off, you’re in good shape. If not, there’s still a little time…

Your Year-End To-Do List

Have you used your ISA allowance?

• £20,000 per person for 2025/26.
• If aged 18–39, consider a Lifetime ISA (up to £4,000 per year).
• Government adds a 25% bonus (up to £1,000 annually).
• Lifetime ISA contributions count towards the £20,000 overall limit.

If you have surplus cash sitting in low-interest accounts, this is often the simplest tax-efficient step.

Have you reviewed pension contributions?

Before 5 April 2026, ask yourself:

• Could you increase contributions this year?
• Would this reduce higher-rate tax?
• Are you in the £100,000–£125,140 income band?

This matters because:

• £4,000 paid into a pension becomes £5,000 with basic rate relief.
• Higher rate taxpayers receive further relief via their tax return.
• Income over £100,000 can effectively suffer 60% tax due to personal allowance tapering – pension contributions can mitigate this.

Timing is critical. Annual limits apply and unused allowances may be available from previous years – but this needs checking carefully.

Should you accelerate dividends?

From 6 April 2026:

• Basic rate dividend tax rises from 8.75% → 10.75%.
• Higher rate rises from 33.75% → 35.75%.
• Additional rate remains at 39.35%.

If you run a company and were planning dividends anyway, consider whether taking them before 5 April 2026 makes sense.

Also review any outstanding director’s loan balances (or new loans being contemplated) as the tax cost of shareholder loans generally increases alongside the dividend higher rate.

Are capital purchases timed wisely?

If your business has a 31 March or 5 April year end, this date really matters.

To qualify for capital allowances:

• The expenditure must be incurred before the period end.
• The asset must be brought into use (especially for hire purchase).

Current reliefs include:

• £1 million Annual Investment Allowance (AIA).
• 100% full expensing for new qualifying equipment (limited companies).
• 100% relief for new zero-emission cars.
• New 40% first year allowance from 1 January 2026 (for qualifying assets).

If you were planning investment anyway, bringing it forward may accelerate tax relief.  But remember, don’t buy purely for tax, that makes no sense – but because it supports your strategy.

Have you reviewed potential capital gains?

Before 6 April 2026:

• Have you used your £3,000 CGT annual exemption?
• Are you considering selling shares or business assets?

Rates for Business Asset Disposal Relief and Investors’ Relief increased from 10% to 14% in April 2025 and will increase again to 18% in April 2026.

If a disposal is already being considered, timing could materially change the tax bill.

Do you have gaps in your State Pension record?

To receive the full State Pension, you generally need 35 qualifying years.

If you have gaps:

• You may be able to pay Class 3 voluntary NICs.
• Current rate: £17.75 per week.
• Usually limited to the previous six tax years.
• Gaps for 2019/20 typically need to be filled by 5 April 2026.

For some people, this can be one of the most cost-effective financial decisions they ever make.

A Final Thought

Year-end planning isn’t about aggressive tax saving. It’s about:

• Avoiding missed opportunities
• Making informed timing decisions
• Ensuring your money is working efficiently

If you’ve read this and thought “I haven’t looked at any of that yet”, you are not alone. The key is simply to review and if needed, discuss them with your accountant before the window closes.

If any of these points raise questions, let’s talk through your specific position and make sure nothing is left on the table.