As the UK tax year draws to a close on 5 April 2026, now is the ideal moment for business owners, high-earners, property investors and families to review their finances and maximise available tax opportunities.
The end of the tax year always brings a wave of activity, but with major changes landing in 2026, including higher dividend tax rates, Making Tax Digital (MTD) for Income Tax, and reforms to capital allowances, being proactive is more important than ever.
Below is a practical guide to what you should be doing right now.
Review Your Personal Tax Position Before 5 April 2026
With fiscal drag continuing, meaning tax thresholds remain frozen despite rising incomes, more individuals are being pulled into higher tax bands. Maximising personal allowances is therefore essential. Key areas to check include:
- Personal Allowance usage is especially significant if your income is between £100,000 and £125,140, where the allowance tapers off. For every £2 you earn over £100,000, you lose £1 of your personal allowance. Earning more than £125,140 means you will not receive any personal allowance.
- Savings and dividend allowances, especially because dividend tax rates rise from 6 April 2026. From April, there will be an additional 2% tax on dividends drawn from a company. The top dividend tax rate, however, will remain unchanged at 39.35%.
Pension contributions
Pensions are one of the most tax-efficient tools for financial planning. By utilising your annual allowance, as well as any available carry-forward allowances, you can reduce your taxable income and safeguard your long-term wealth.
If your cash flow allows, you should consider making additional pension contributions. This strategy not only enables you to benefit from income tax breaks but can also help you preserve some of your personal allowance or potentially move from the 40% tax bracket to the 20% tax bracket.
We recommend consulting with a financial advisor before taking any steps. If you don’t currently have a financial advisor, please reach out to us, and we will help point you in the right direction.
Planning for Business Owners & Limited Companies
Understand your Corporation Tax banding
Corporation Tax remains split into main, small‑profits and marginal rates:
- 0–£50,000 taxable profit → 19%
- £50,001–£250,000 → marginal relief (effective rate up to 26.5%)
- Over £250,000 → 25%
If your business is in the marginal band, it’s important to evaluate whether you need to purchase any capital equipment. If you do, now is the time to act. Do you need a new laptop or printer? What about other machinery for your operations?
Also if you are able to accelerate some payments from say April to March, that delivers some cashflow advantages as the tax relief is received earlier.
Changes to Capital Allowances in 2026
Two key changes take effect in 2026:
From 1 January 2026, a new 40% first-year allowance (FYA) will be available for qualifying expenditure incurred by companies and unincorporated businesses.
A few key points to note:
- It can be used against leased assets (excluding overseas leasing).
- It cannot be used for cars or second-hand assets.
- It’s most useful when the Annual Investment Allowance (AIA) or other FYAs aren’t available.
This relief won’t suit every situation, but if you’re planning large capital investment in 2026, it’s worth factoring it into your decision-making. As always, the timing of expenditure could make a real difference.
It is also worth noting that the main writing-down allowance decreases from 18% to 14%. For most small businesses, this will only be relevant with higher-emission cars.
Paid your dividends yet?
From April, there will be an additional 2% tax on dividends drawn from a company. The top dividend tax rate, however, will remain unchanged at 39.35%. Therefore, you should consider bringing forward the dividend payment into the current tax year.
However be warned! This also brings forward any personal tax liability a year from January 2028 to January 2027. So, seek advice from your accountant before taking any steps.
If you are working with us, now is the time to contact your regular manager by phone or email.
Increasingly, though, that’s not always the most tax-efficient option to just take dividends so you should also revisit your remuneration planning.
Tax Planning for Sole Traders & Unincorporated Businesses
From April 2026, MTD for Income Tax becomes mandatory for many sole traders and landlords. This means quarterly reporting and maintaining digital records.
It’s not too late to start planning but you need to start now.
You can read our full guidance here
Property Owners & Landlords: Don’t Miss Key Changes
Property income taxation faces a series of updates:
- New separate income tax rates for property from 2027.
- MTD for landlords from April 2026.
- Renters’ Rights Act – the main changes coming in May 2026. Our last blog on the topic is a good guide to familiarise yourself of the changes. Here’s the practical advice for landlords.
Final Thoughts
With so many moving parts from dividend tax rises and capital allowance changes to MTD and property‑tax reforms, this year calls for early action. A smart end-of-year review can help you:
- Reduce your tax bill
- Strengthen cash flow
- Ensure compliance
- Position your finances for future stability
There is a lot of information to process here, and you may have a few questions. Please don’t hesitate to reach out to your normal manager at Myers Clark, who will be more than happy to assist you.
Remember, there is a limited time to organise the plans, so if you have any concerns about the topics discussed, it’s important to act quickly.
If you are not yet working with us, here’s more on how we work