As the end of the tax year approaches, it’s time as a business owner to review your finances. This guide will give you further insight to ensure reliefs are maximised and planning opportunities are considered.
Owner Managed Businesses
As the end of the tax year approaches, it’s time as a business owner to review your finances. This guide will give you further insight to ensure reliefs are maximised and planning opportunities are considered.
Profit Extraction for Limited Companies
With varying tax rates and the recent increase in Employer’s NIC, before we reach the end of the tax year, it is beneficial to consider the tax efficiency of profit extraction from your business.
How you extract your profits from your business can include:
- Salary
- Dividends
- Pension
- Benefits
- Rent on a property you own
The way in which you do so can have a significant tax impact on you personally but also on your company. The best approach will depend on your personal circumstances.
Making Tax Digital for Income Tax
Making Tax Digital for Income Tax begins its phased rollout from 6 April 2026, bringing significant change for self‑employed individuals and landlords.
From that date, MTD will apply to those with annual gross self‑employment and/or property income over £50,000, extending to those exceeding £30,000 from April 2027 and £20,000 from April 2028.
Tax payers within scope must keep digital records, submit quarterly updates, and finalise their annual tax position using compatible software. As HMRC will use 2024/25 tax returns to identify who is mandated from April 2026, we strongly encourage our clients to review their bookkeeping systems now, confirm software readiness, and speak with us as early as possible to ensure you are fully compliant well before the new requirements take effect.
Preparing for IHT changes
From 6 April 2026 the first £2.5 million of agricultural and business property will receive 100% relief from IHT.
50% relief will be available for amounts over £2.5 million.
For married couples and civil partners it is therefore possible to have a combined allowance of up to £5 million.
These allowances refresh every 7 years so it’s important in terms of succession and IHT planning to consider a gifting strategy during your lifetime.
Where outright gifts are not suitable, a business owner could consider utilising a trust as an alternative option. The trust structure provides additional benefits over and above an outright gift in terms of control, protection and flexibility.
There is a small window of opportunity to transfer unlimited business and agricultural property into trust before 5 April 2026. Thereafter the £2.5 million allowance will apply.
Trading vs investment
Business Property Relief is available for trading companies. This relief is not available for investment companies.
Where the nature of the activities of a trading business is likely to change over time, it is important to consider the share structure of the company before the business activities evolve into investment.
Such forward planning can assist with transferring wealth to the next generation and beyond tax efficiently and help assist with future IHT exposure.
Explore everything in one place
Download our full 2025/2026 Year End Tax Planning guide for a clear, helpful overview, designed to make year end tax feel a little easier.
Real people. Real support.
Read more about tax year end planning:
Private Clients
Find out more about reliefs and planning opportunities for your private wealth including:
- Income tax planning
- Investments
- Capital Gains tax planning
- Inheritance tax
- Residency and domicile
Property Tax
Find out what factors you need to consider when reviewing your property tax strategy:
- Stamp Duty Land Tax (SDLT)
- Property capital allowances
- Property VAT planning
- Upcoming changes to rental income tax, Council Tax surcharge, and business rates.
Employers
As the end of the tax year approaches, employers should be prepared for decision surrounding:
- PAYE, wages. benefits and expenses
- Employee status and self-employed engagements
- Apprenticeship levy and workforce planning
- Off-payroll working (IR35)
- Key dates and deadlines
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