The start of a new tax year is an ideal time to take stock of your financial position and consider practical steps that could improve tax efficiency, strengthen cash flow and reduce future surprises. Many opportunities are time sensitive, so early planning can make a measurable difference.
Below are ten practical “resolutions” to consider for the 2026-27 tax year.
1. Make full use of your tax allowances
Each year valuable allowances can be lost if they are not used. Consider the personal allowance, dividend allowance, savings allowance, pension annual allowance and capital gains exemptions. Using allowances regularly can reduce the risk of building up avoidable tax liabilities later.
2. Review your profit extraction strategy
Company owners should consider whether the balance between salary, dividends and pension contributions remains appropriate. Changes to tax bands and thresholds can alter the most efficient mix from year to year.
3. Plan pension contributions early
Pensions remain one of the most tax efficient planning tools available. Early contributions can spread cash flow and maximise available relief. Forward planning also allows consideration of carry forward rules where appropriate.
4. Check whether Making Tax Digital applies to you
Making Tax Digital for Income Tax begins to affect more taxpayers from April 2026, particularly those with self-employment or property income above the relevant thresholds. Early preparation allows time to select suitable software and avoid last minute disruption.
5. Keep better digital records
Maintaining accurate digital records helps reduce errors and improves visibility of business performance. Businesses that review results regularly often make better decisions and identify tax planning opportunities earlier.
6. Consider the timing of capital expenditure
Investment in equipment, vehicles or technology may qualify for capital allowances or full expensing relief. Planning the timing of expenditure can accelerate relief and support cash flow.
7. Review family tax planning opportunities
Income shifting between spouses or civil partners can often be achieved legitimately through ownership adjustments or use of available allowances. Care is needed to ensure arrangements reflect genuine commercial reality.
8. Monitor cash flow regularly
Inability to pay tax, frequently arises because funds have not been set aside during the year. Setting aside a regular percentage of profits can reduce pressure when payments fall due.
9. Check that your business structure is still appropriate
As businesses grow, the most suitable structure can change. Sole traders may benefit from incorporation, while companies may benefit from group structuring or changes to shareholdings.
10. Schedule a tax planning review before the year end
Early discussion allows more options than last minute planning. Identifying opportunities in advance of 5 April 2027 increases the likelihood that planning steps can be implemented efficiently.
Planning is rarely about aggressive tax saving. More often it is about organisation, timing and awareness of available options. Small adjustments made consistently can lead to meaningful long term savings.
If you would like to review your tax position for 2026-27, please contact us to arrange a planning discussion.
If you feel this alert could help a business colleague or family member, please feel free to share it with them.
