With the tax and financial year end approaching, it’s a good time to check you’re taking full advantage of the reliefs and allowances available. Please speak to us if any of the following may apply to you.

Savings
If you have spare cash, one obvious tax planning opportunity is to maximise your ISA allowance for the 2025/26 tax year (currently £20,000 per person). If you are aged 18–39, you can open a Lifetime ISA to save for your first home or retirement. You can contribute up to £4,000 per year until age 50, but your first payment must be made before you turn 40. The government adds a 25% bonus to your savings, up to £1,000 per year. Remember, the £4,000 Lifetime ISA allowance counts towards your overall £20,000 ISA limit.

Pension Planning
You may also wish to consider increasing your pension contributions before 5 April 2026.

Currently, the government adds 20% basic rate tax relief to personal pension contributions. For example, if you save £4,000, the government tops it up to £5,000. Higher rate taxpayers can claim an additional £1,000 tax relief when their liability is calculated, reducing the net cost to £3,000.

Additional contributions can be especially effective if your income is between £100,000 and £125,140, as pension contributions reduce net income for the purposes of the personal allowance taper. Every £2 of income above £100,000 reduces your £12,570 allowance by £1, down to nil at £125,140 — a potential 60% tax saving. Timing is key, and annual contribution limits apply. Contact us for guidance tailored to your circumstances.

Dividends and Company Loans
From 6 April 2026, the income tax rates on dividends increase by 2 percentage points: basic rate from 8.75% to 10.75%, higher rate from 33.75% to 35.75%, with the additional rate unchanged at 39.35%.

The higher rate also applies to the “penalty tax” on certain company loans to shareholders made on or after 6 April 2026. Consider the timing of dividend payments and loans before the end of the tax year to benefit from the 2025/26 rates. Always take professional advice before acting.

Capital Allowances
For businesses with a 31 March or 5 April year end, the year-end is important for claiming capital allowances. Expenditure must be incurred before the end of the accounting period to qualify.

Limited companies and unincorporated businesses can claim 100% of the first £1 million spent on new and used equipment in a 12-month period under the Annual Investment Allowance (AIA). Motor cars are excluded, except for new zero-emission vehicles.

Additionally, limited companies can fully expense most new equipment against profits with no upper limit. From 1 January 2026, a new 40% first-year allowance applies to qualifying assets (excluding cars and second-hand items), particularly useful for unincorporated businesses that have used all of their AIA.

For hire purchase acquisitions, capital allowances are available on the full asset cost provided it is in use by the year-end, even if payments are spread over months. Timing is crucial.

Capital Gains Tax Planning
If you have not used your £3,000 CGT annual exemption for 2025/26, consider bringing forward gains before 6 April 2026.

Rates for Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) rose from 10% to 14% on 6 April 2025, and will increase to 18% on 6 April 2026. Accelerating qualifying disposals may reduce your tax liability.

Voluntary National Insurance Contributions
To qualify for a full state pension, a retiring individual needs 35 ‘qualifying years’. Gaps in your National Insurance record can be filled by paying Class 3 voluntary contributions at £17.75 per week (£18.40 in 2026/27).

Voluntary contributions are generally limited to the past six years, meaning 2019/20 gaps must usually be paid by 5 April 2026.