The end of the tax year is closer than you think: 6 Smart moves for Company Directors

Published: 03/11/2025 By Hannah Duncan

It might only be the start of November, but the smartest business owners are already thinking ahead to 5 April 2026.

The end of the tax year has a way of creeping up fast and leaving little time to make meaningful changes once you’re in the final stretch.

Early planning gives directors more control, better tax efficiency, and fewer last-minute surprises. Whether you run a growing limited company or manage a well-established business, reviewing your position now can make a real difference when it comes to your 2025/26 tax bill.

Here are six practical actions to consider before the year-end.

1. Review your Director’s remuneration strategy
Now is the time to review how you’re paying yourself. Getting the right balance between salary and dividends can help you minimise both Income Tax and National Insurance contributions.
For many directors, a small salary up to the National Insurance threshold combined with dividends remains an efficient approach but the optimal split depends on your company’s profits, personal income, and changing tax bands.
Remember that the dividend allowance has fallen significantly in recent years, meaning more directors are now paying tax on dividend income. Reviewing your remuneration strategy well before year-end allows time to make adjustments and avoid unexpected liabilities later on.

2. Make the most of allowances and reliefs
Every year brings valuable allowances that disappear if you don’t use them. Now’s the time to make sure you’re making the most of them:

• Pension contributions - Employer pension contributions remain one of the most tax-efficient ways to extract profits from your company. They can reduce Corporation Tax and build your long-term retirement savings. Come and see our Wealth team for more advice.
• ISA and dividend allowances - If you take income through dividends or have personal investments, ensure you’ve used available allowances before 5 April.
• Capital allowances - If you’re considering investing in equipment, vehicles or other assets, you may be able to claim full expensing or annual investment allowances to reduce your Corporation Tax bill.

A quick year-end review with your accountant can reveal reliefs or allowances you might otherwise overlook.

3. Extract profits efficiently
If your company has built up surplus cash, consider how best to extract it before the year-end. There are several routes each with different tax implications:

• Dividends - if the company has sufficient retained profits.
• Bonuses - which can be deductible for Corporation Tax purposes but attract Income Tax and NICs
• Pension contributions - which are tax-deductible for the company and free of personal tax when made within annual limits.

The right mix depends on your overall financial goals and cash flow. Planning ahead means you can extract profits in the most efficient way rather than rushing decisions in March.

4. Plan for Corporation Tax
With the main rate of Corporation Tax at 25%, the difference between planning and reacting can be significant. Reviewing your year-end forecast early gives you time to:

• Accurately estimate your Corporation Tax bill.
• Consider accelerating or deferring income and expenditure to manage taxable profits.
• Explore R&D tax relief, loss relief, or other credits your company might qualify for.

Corporation Tax planning is no longer a simple box-ticking exercise, it’s a chance to align your business decisions with your tax strategy and make sure you’re not paying more than necessary.

5. Tidy up your Director’s Loan account
Director’s loan accounts can easily become messy over the year, especially if you’ve taken drawings or paid personal expenses through the company account.

If your director’s loan account is overdrawn at year-end, you may face a Section 455 tax charge, an additional Corporation Tax of 33.75% on the outstanding balance. This can usually be reclaimed later, but it ties up company cash unnecessarily.

Clearing the balance before 5 April, or planning how to do so, avoids this problem and keeps your books in good shape for year-end.

6. Don’t forget personal tax planning
Tax planning doesn’t stop at the company level. As a director-shareholder, your personal and business finances are closely linked.
Before 5 April, consider:

• Gift Aid donations to reduce your taxable income.
• Using your Capital Gains Tax allowance if you plan to sell or transfer investments.
• Reviewing your inheritance tax and estate planning arrangements.

A little preparation now can prevent larger tax bills and help you make the most of available reliefs while they’re still in place.

Start Planning Early, Reap the Rewards Later
By taking a proactive approach to tax year-end planning, you’ll not only make full use of your allowances but also put your company in a stronger position for the new financial year.

The earlier you start, the more options you’ll have and the less likely you are to face an unexpected bill come April.

Our accountancy team specialises in helping business owners and company directors navigate the year-end process efficiently and strategically.