Below we highlight some of the main areas worth considering. If any of these apply to you, please speak to us before taking action so we can advise based on your individual circumstances.
Use your ISA allowance before it resets
Many tax allowances operate on a strict “use it or lose it” basis, and ISA allowances are one of the most commonly missed opportunities each year. If you hold savings outside an ISA, interest and investment income may be taxable. Moving funds into an ISA before the year end can permanently shelter them from tax. Here are some points to bear in mind:
- The ISA allowance is currently £20,000 per person
- All interest and investment growth within an ISA is tax-free
- Unused allowance cannot be carried forward to the next tax year.
What is a Lifetime ISA?
For younger savers in particular, the Lifetime ISA can provide a significant boost to long-term savings. The Government bonus effectively gives an immediate return on contributions, making it one of the most valuable reliefs currently available.
- Available if you are aged 18 to 39
- You can contribute up to £4,000 each year
- The Government adds a 25% bonus (up to £1,000 annually)
- Contributions can continue until age 50
- The £4,000 counts towards your £20,000 overall ISA allowance.
Pension contributions provide tax relief
Pension contributions remain one of the most effective tax planning tools available.
In addition to building retirement savings, contributions attract tax relief and can reduce your taxable income for the year. Making contributions before 5th April ensures the relief applies to the current tax year. The Government currently adds basic-rate tax relief automatically as follows:
- A £4,000 contribution becomes £5,000 in your pension
- Higher-rate taxpayers can claim further relief through their tax return
- The effective cost of a £5,000 contribution could be just £3,000.
Pension opportunity for £100k plus earners
This area is particularly important for higher earners, as pension contributions can restore tax allowances that would otherwise be lost.
Your personal allowance (£12,570) is reduced by £1 for every £2 of income above £100,000 and disappears entirely at £125,140. This creates an effective 60% tax rate in this band.
A pension contribution reduces your net income for this calculation, meaning contributions can produce substantial tax savings. The timing of contributions and annual limits are important, so tailored advice is recommended.
Filling gaps in your State Pension record
Many people assume their State Pension entitlement is fixed, but gaps in National Insurance records can reduce the amount received in retirement. The tax year end is often the final opportunity to correct older shortfalls.
To receive the full State Pension, you typically need 35 qualifying years of National Insurance Contributions (NICs). If you have missing years, it may be possible to improve your entitlement by making voluntary payments.
Note that Class 3 voluntary NICs cost £17.75 per week (£18.40 in 2026/27)
Normally you can only go back six years, meaning gaps in the 2019/20 tax year must usually be filled by 5th April 2026. After that, the opportunity may be lost.
Dividend payments and company loans before April 2026
Owner-managed businesses should review how profits are extracted before the tax year end. Changes to dividend taxation mean that the timing of payments between March and April 2026 could directly affect the tax payable.
Dividend tax rates are due to rise from 6th April 2026:
- Basic rate: 8.75% → 10.75%
- Higher rate: 33.75% → 35.75%
- Additional rate remains 39.35%
The higher rate increase will also affect the tax charge on certain loans made by companies to shareholders. If you operate through a company, you may wish to consider:
- The timing of dividend declarations
- Whether to repay or avoid certain director/shareholder loans
Using the lower 2025/26 rates, where appropriate, could result in meaningful tax savings.
Capital allowances and business equipment purchases
Businesses often plan capital expenditure around operational needs, but tax relief can depend heavily on timing. Where a business has a 31st March or 5th April year end, purchasing equipment even a few days earlier can accelerate tax relief by an entire year.
To claim capital allowances, expenditure must be incurred before the accounting period ends. Bringing forward planned purchases may therefore be beneficial.
Deduct business expenditure via Annual Investment Allowance (AIA)
The Annual Investment Allowance allows businesses to deduct qualifying expenditure in full rather than over several years.
- 100% tax relief on the first £1 million spent on equipment in a 12-month period
- Available to both companies and unincorporated businesses
- Excludes motor cars
There is also:
- 100% relief for new zero-emissions cars
- Full expensing for companies purchasing new equipment (no financial cap)
From 1st January 2026, a new 40% first-year allowance applies to certain qualifying assets (excluding cars and second-hand assets), particularly helpful where the AIA has already been used.
Even assets bought on hire purchase can qualify, provided they are brought into use before the year end.
- Basic rate: 8.75% → 10.75%
- Higher rate: 33.75% → 35.75%
- Additional rate remains 39.35%
The higher rate increase will also affect the tax charge on certain loans made by companies to shareholders. If you operate through a company
Plan capital gains tax before the rate increases
If you are considering selling investments, property (other than your main residence), or shares in a business, the tax year end is an important planning point. Reviewing disposals early allows time to use available exemptions and potentially benefit from lower tax rates.
- Each individual has a £3,000 annual CGT exemption for 2025/26
- Unused allowance is lost if not used.
Business Asset Disposal Relief and Investors’ Relief
For business owners and investors, forthcoming changes to relief rates make timing particularly important.
Rates have already increased from 10% to 14% (April 2025) and will rise again to 18% from April 2026. Where a qualifying disposal is already under consideration, completing it before the change could significantly reduce the tax payable.
Speak to our Corporate and Personal Tax team at LWA to maximise your tax reliefs before 5th April
Year-end tax planning is most effective when carried out early and based on your specific financial position. Acting without advice can sometimes create unintended tax consequences.
If you think any of the points above may apply to you, please contact us and we will review your circumstances and identify any tax-saving opportunities available before 5th April 2026.
You can call us on 0161 905 1801 in our Manchester office, or 01925 830 830 in Warrington, or you can email your query to mail@lwaltd.com.