Tax Year 2025/26: Let’s get you set up for success!

The new tax year is well underway now, and it’s the perfect time to get organised, check your financial health, and put plans in place for a smoother ride. Whether you’re a sole trader or running a limited company, we’ve pulled together our top tax planning tips to help you make the most of 2025/26.

Sole Traders: Keep it lean and smart

Make the most of your Personal Allowance
You can earn up to £12,570 tax-free. If you have control over when you’re paid, it might be worth thinking about how to time your income to use this fully.

Track every expense
From home office costs to training courses and marketing spend, every penny counts, especially with rising costs. Good record-keeping can help cut your tax bill, so try noting down expenses monthly (maybe when you send invoices?). A simple habit that can really pay off.

Pension contributions = tax benefits (for a limited company or high rate taxpayer)
Paying into a pension? Great! Basic rate tax relief is often added automatically, but if you’re a higher-rate taxpayer, we can help you claim extra relief through your self-assessment.

If you are a limited company director, a pension payment from the company is a tax-deductible expense and worth making if you can wait until you are 55 for the cash.

For all the basic rate tax payers – you get tax relief at the basic rate via the pension company when you make a contribution.  You don’t miss out; you just don’t see it.

Got a side hustle?
If you’ve got a small second business bringing in under £1,000 profit, you can use the Trading Allowance to make that income tax-free. Handy if you’ve got a creative sideline alongside your main work.

Reporting is changing for this in the near future, and income of £3,000 and above needs to be reported.  Confusingly, you will still have to pay tax on income over £1,000 so tax returns will still be needed.

Stay ahead on your self assessment
Get organised now and future you will thank you (as well as us). And if this year’s records are a bit messy we’re here to help you get back on track.

Now is the ideal time to set up software, as we are only one month into the new tax year.  Send us a message and we can give you some suggestions.

Limited Companies: Think Strategically

Know your corporation tax rates
Profits under £50,000? Taxed at 19%. Over £250,000? That’s 25%. If you’re in between, marginal relief applies. We will help you figure out where you land and how to optimise.

Pay yourself wisely
It’s all about finding the right balance between salary and dividends. Allowances reset each April, so now’s a good time to review how you draw income and make sure you’re saving enough for tax.

You can (and many do) take to much out of the company and end up in hot water at the company year end.  Keep track of your profits to make sure you are taking out the profit that is there.

Use capital allowances
Making big purchases for the business? You may be able to deduct the full cost against your tax bill using the Annual Investment Allowance.

We love watching a tax bill come down with the AIA! Although we would say only buy what is needed for the company as a laptop won’t pay a mortgage, at the end of the day.

Get your records in top shape
Start the tax year fresh by reviewing your bookkeeping and accounting systems. Solid records don’t just keep HMRC happy, they help you make better decisions.

Good habits for everyone

– Stay updated: Tax rules change, and fast. We keep tabs on the latest info, so you don’t have to.
– Keep records tidy: Less stress at year-end, more control all year long.
– Ask for help: Every business is unique. That’s why our advice is tailored to you.

Key deadlines to know

– Self Assessment: Due 31 January 2026 (for 2024/25)
– Corporation Tax: Due 12 months after your accounting period ends
– Limited accounts: need to be filed 9 months and 1 day after the year end
– VAT Returns: Usually quarterly or monthly

Let’s Chat

Not sure where to start? Whether you’re feeling super organised or slightly overwhelmed, we’re here to help. Let’s make this tax year your most efficient yet.

What’s your top priority for 2025/26? Drop us a line, we’d love to hear about it.