Over the last ten years, laws that were once looser have been tightened, making it a criminal offence for us to back-date tax planning. When the financial year-end passes, so too do any opportunities to change your bill and gain a tax advantage. But despite this, annual accounts don’t need to spell stress: by knowing your dates, and being mindful of what needs to happen (and when), it’s easy to stay ahead of the game.
Essentially, each financial year exists in a bubble. To reduce your tax bill for a year, strategic changes must be made during the same year. When that deadline passes, and the next year begins, it’s not possible to go back. If you’re a company, this end date might vary depending on when your accounting period begins, but most commonly, it’s 31st March. However, confusion often creeps in because you might not actually pay that tax bill for another nine months.
For example, any action you take from 1st April 2025 to 31st March 2026, and any profits you earn during that time, is what will affect your tax bill for the same period. Despite this, you may not pay the bill itself until 1st January 2027. This delay can make things tricky if you don’t have good financial visibility. Unless you already know your numbers, you’ll be paying out for an annual accounts service, with no idea of how much your tax bill is likely to be. Usually, your accountant won’t be able to start work on your accounts and tax calculations until mid-April; long after the 31st March deadline has passed and your tax position is locked. At this point, they can’t do anything more.
The solution lies in taking control of your numbers. In our industry, “proactive” and “real time information” are terms you’ll frequently hear – but what significance do they really have for you? Ultimately, they mean empowering yourself to act by having a clear view of your own situation. Being proactive, and assessing your figures and tax position as the year progresses, can make all the difference to that final bill.
Having this information allows you to anticipate profit levels, estimate what taxes might be coming your way, and take action before the year-end passes. We’d recommend doing this in the last quarter of the financial year (ideally around January 2026), so that you have enough data to make an informed decision and enough time left to take any action.
If your practice is a limited company, your dividend planning, by law, happens in real time. The important date for this is 5th April – a date that’s even more crucial this year, as rates are set to increase by 2% from April 2026. Reviewing the dividends you’ve already taken could allow you to “top up” and take advantage of a lower tax rate before it ends.
For help with any of these things – from setting up your bookkeeping to saving tax, to dividend planning – you can always reach out for our help. We’d far rather speak to you sooner, and unlock savings while we can, than see you burdened with the frustration of an unnecessarily heavy tax bill. And, if you’re already one of Hive’s accountancy clients, we offer pre-year-end tax planning as an inclusive part of our service. We’re regularly able to secure tens of thousands of pounds in tax savings, so make 2026 the year you get in touch and make it happen.
