Planning ahead for the 2026 tax year-end: Practical moves for tax payers

CREATED BY ROGER EDDOWES Published: 16/02/2026 @ 09:00AM #TaxYearEnd #2026 TaxPlanning #BusinessFinance #ISAs #Dividends

Here's a useful run-through of what to review before the tax year-end on the 5th of April 2026. It covers business allowances, dividend changes, ISA tweaks and upcoming property surcharges. Think of it as a quick nudge to plan early and avoid last-minute stress ...

Tax year end is near, Papers, forms, and numbers swirl, Taxes planned right

Getting ready for the tax year-end on the 5th of April 2026 is less about clever tricks and more about making deliberate choices early enough to matter. Those who treat tax as a forward-looking planning exercise usually keep more flexibility, reduce avoidable tax, and make better decisions under less pressure.

The best results usually come from acting well
before the 5th of April arrives!

A useful starting point is to step back and ask what the next 12–24 months are meant to achieve. When my clients revisit their goals - such as building cash reserves, extracting profits, investing in the business, or preparing for a sale - they can align timing, income, and investment decisions with the reliefs that are actually available.

I usually position this process as a short, structured check-in, then turn it into specific tax planning tips that can be implemented over weeks rather than rushed in days.

For companies, the broad direction of travel is stability on headline rates, but tighter mechanics on relief. Corporation Tax is expected to remain at 25% for profits above £250,000, with a 19% small profits rate up to £50,000, so planning often shifts towards managing profit levels and ensuring claims are cleanly evidenced. It's easy to overlook how much the timing of invoices, bonuses, or capital spend can move the needle, especially where profits sit near thresholds.

Employment-related choices are also part of year-end thinking now that Income Tax and National Insurance thresholds will remain frozen for longer; more employees will drift into higher effective rates over time, which can change the balance between salary, bonuses and benefits.

Salary sacrifice still matters, but I always say to my clients that they should keep one eye on the planned change from April 2029, when only the first £2,000 of employee pension contributions via salary sacrifice would stay NIC-free. This means long-term reward strategies are worth revisiting rather than assuming today's position will hold indefinitely.

For owner-managed businesses, taking profits out of
the company is rarely a one-size-fits-all answer!

The dividend allowance is expected to remain at £500, but from the 6th of April 2026, the tax rates on dividends for basic and higher rate taxpayers are due to rise by 2%, while the additional rate stays as it is. This means the 'mix' between salary and dividends can shift, and the right answer will depend on the client's wider income, their spouse or civil partner's position, and the timing of distributions either side of the tax year end.

Personal investing choices also need to be coordinated, because ISA rules are becoming more directional.

The overall ISA subscription limit is set to remain £20,000 for 2026/27 (with Junior ISA and Child Trust Fund limits at £9,000 and Lifetime ISA at £4,000, excluding the bonus), and those limits are expected to stay frozen for several years.

From April 2027, however, the cash portion is planned to be capped at £12,000 for most people, pushing the remainder towards stocks and shares, while those aged over 65 are expected to keep a full £20,000 cash option; those who prefer cash may want to plan contributions accordingly.

Anyone with multiple income sources should remember that self-assessment is where good planning either shows up clearly or becomes messy!

Clean records for dividends, interest, pension contributions, gift aid, and allowable expenses reduce errors and help clients claim reliefs confidently. Where there are investments or asset disposals, capital gains tax planning should be brought into the same timeline, because selling decisions made for commercial reasons can often be timed or structured in a way that reduces tax without changing the underlying strategy.

Property owners at the very top end have another reason to plan ahead, even though it lands later. From April 2028, a High Value Council Tax Surcharge is expected for homes valued at £2 million or more, with higher annual charges as values rise, so clients considering moves, restructuring ownership, or long-term holding costs should factor this into their forecasts now rather than treating it as a future problem.

When I translate all of this into an action plan, a short checklist usually beats a long report, provided it is specific to my individual client:

• Confirm likely 2025/26 income, dividends and gains early enough to adjust timing sensibly.
• Model whether planned capital purchases should be brought forward, delayed, or re-specified to meet allowance rules.
• Agree on an extraction plan that reflects the post‑April 2026 dividend rates and wider household income.
• Use available ISA and pension allowances intentionally, not as an afterthought.

The point is not to do everything all at once, but to do the right few things early and document them well, so you stay in control.

With a calm plan, the numbers usually work harder, the self-assessment process becomes smoother, and the final run-in to the tax year-end feels routine rather than reactive.

And that's why planning ahead for the 2026 tax year-end is a very practical move.

Until next time ...

ROGER EDDOWES
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

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