Come rain or shine, the end of another tax year falls on the 5th of April. As accountants, it’s after this date that we complete our work on your accounts and tax submission. And often, this is the point when a client might ask: “can’t we do something about the tax bill?”

Unfortunately, we can’t – when we’re preparing your accounts and tax return, we’re only documenting what’s already happened. The actions to save tax need to be taken in real time and can’t be backdated. This means that to bring down this year’s tax bill, you need to act before this year’s April deadline.

Obviously, the best tax advice is bespoke to individual circumstances, and follows on from a detailed exercise with an expert. But if you’re looking for things you could potentially do now, to impact on the tax bill due later this year, you may like to consider the following:

Contributing to your pension pot

Pension contributions can be made as an individual or as a company, but either way this is an easy win that can save you a lot of tax. We’d always recommend working with a financial adviser to gauge the right level of contribution, so thinking about it a few weeks in advance (i.e. now) is a must.

Buying equipment

There are generous tax reliefs available for those buying equipment, with 100% of the cost being written off against your profits. However, tax rules state that the equipment must be installed and in use for the allowances to be claimed. So, if you know there are long lead times for delivery, especially for larger items, it’s better to get your order in now.

Buying an electric vehicle

As a company, you can write off 100% of the cost of buying an electric vehicle (EV). Even better, the company can actually pay for all the running costs, which in turn reduces the amount of money you need to draw from the business, saving you dividend tax. The once-mammoth lead times on ordering an EV have reduced now, but there may be a delay so it’s still worthwhile to get the ball rolling as soon as possible.

Paying family members

If members of your family help with any aspect of the business (for instance, with marketing or behind-the-scenes admin) and have no other forms of income, you could consider paying them a salary. This is a win-win: an expense for the company and tax-free cash for them.

Reviewing your income split

If you’re a mixed practice, it’s useful to review your income split to ensure you’re eligible to claim the employment allowance next year. If your split is close, but not quite right, putting a few more private cases through ahead of April 5th could ultimately save you up to £5,000.

Declaring a dividend

Declaring a pre-year-end dividend can be very cheap and allows you to make the most of your tax band. As a basic rate taxpayer, the current tax rate on dividends is only 8.75%, so even if you don’t require the cash right now, declaring a dividend will “lock in” this low tax rate while it lasts. Then, if you prefer, you can leave the money in the company until you choose to draw it.

…And finally, don’t forget your trivial benefits

This is a small win, but an enduringly popular one. You might already know that you can reward your staff with trivial benefits up to the value of £50, as many times as you like, as long as it’s not in cash or a cash voucher. As a director, you can reward yourself, tax-free, up to the value of £300 per year. So, if you haven’t already spent this, you could treat yourself to a gift card or a nice lunch ahead of the deadline. Just remember to stick to the £50 limit each time.

Start planning for next year

We’re here to help practice owners make the most of their income, with an in-house team of tax experts. In this article, we’ve outlined some good last-minute savings options, but even better results will come from thinking further ahead. If you’re keen to get a full tax plan in place for the next financial year, get in touch so that we can work with you to reduce your tax bill, in real time.