TL;DR: The UK tax year ends April 5, 2026, and unused allowances worth £5,000-£20,000+ disappear forever. Critical actions: maximize £20,000 ISA allowances per person (£40,000 for couples) for tax-free growth, optimize pension contributions (£60,000 annual allowance with 3-year carry-forward) to gain up to 45% tax relief and avoid the 60% marginal rate trap at £100,000+ income, and harvest capital gains using your £3,000 CGT allowance (£6,000 for couples). Company directors should review salary vs dividend mix to use the £500 dividend allowance effectively. Act 4-8 weeks before April 5 deadline
Introduction
The UK tax year ends on 5 April 2026 at midnight. After that date, unused tax allowances worth thousands of pounds disappear forever. For company directors, sole traders, and high earners, the weeks between January and early April represent the most valuable tax planning window of the year.
The question “when does the tax year end” generates over 3,800 monthly searches in the UK, peaking in March as taxpayers scramble to understand deadlines. However, those who wait until the last week of March face limited options. Banks need time to process ISA transfers. HMRC systems can delay pension relief claims. And strategic moves like capital gains tax harvesting or salary-dividend rebalancing require advance planning.
This year-end tax planning guide provides a 10-step checklist for maximizing tax reliefs before 5 April 2026. Whether you are a company director optimizing salary versus dividends, a landlord harvesting CGT losses, or a high earner maximizing pension contributions, these strategies could save you £5,000 to £20,000+ in tax. Each step includes specific deadlines, calculation examples, and common mistakes to avoid.
Acenteus CCA delivers tax planning and advisory services for UK businesses, directors, and accountants. Our tax specialists identify year-end optimization opportunities, calculate optimal salary-dividend mixes, and handle compliance whilst you focus on running your business. Contact us for a complimentary tax efficiency review before 5 April 2026.
Why Tax Year End Planning Matters
When does the tax year end in the UK? The tax year runs from 6 April to 5 April the following year. The current 2025-26 tax year ends on 5 April 2026 at 11:59 PM. Unlike calendar year countries, the UK tax year end date remains fixed on 5 April regardless of weekends or bank holidays.
Why does the tax year end on 5th April? The quirky date traces back to 1752 when Britain adopted the Gregorian calendar. The old tax year ended on Lady Day (25 March), but the calendar change added 11 days. The Treasury refused to lose revenue, so moved the tax year end to 5 April (25 March + 11 days). A further day was added in 1800, creating the modern 6 April to 5 April tax year.
Use-It-or-Lose-It Tax Allowances
Most UK tax allowances reset on 6 April and cannot be carried forward:
- ISA allowance: £20,000 per person (cash ISAs, stocks and shares ISAs, innovative finance ISAs)
- Junior ISA: £9,000 per child
- Personal CGT allowance: £3,000 (reduced from £6,000 in 2024-25)
- Dividend allowance: £500 (reduced from £1,000 in 2024-25)
- Personal savings allowance: £1,000 (basic rate) or £500 (higher rate)
- Annual pension contribution limit: £60,000 (or 100% of earnings if lower)
- Gift aid donations: No annual limit but must be made before 5 April to claim in current tax year
When is the end of the tax year for these allowances? All unused allowances expire at midnight on 5 April 2026. Money not contributed to ISAs or pensions by that deadline cannot benefit from 2025-26 tax relief.
Tax Planning Deadline: Why Act Now
Step 1: Maximize ISA Allowances (Deadline: 5 April 2026)
When does ISA tax year end? ISA allowances reset on 6 April each year. You have until 5 April 2026 to use your £20,000 ISA allowance for 2025-26. When does the ISA tax year end? It follows the same 5 April deadline as income tax.
Why ISAs Matter
Individual Savings Accounts (ISAs) shelter investment gains, interest, and dividends from all UK tax. Unlike pensions, you can withdraw ISA funds anytime without tax penalties. For higher-rate taxpayers, ISAs eliminate 20% dividend tax and 20% capital gains tax. For additional-rate taxpayers, the savings reach 39.35% on dividends and 24% on capital gains.
2025-26 ISA Allowances
- Adult ISA: £20,000 per person per tax year
- Junior ISA: £9,000 per child per tax year
- Lifetime ISA: £4,000 (counts toward your £20,000 adult ISA allowance)
What happens to ISA at end of tax year? Your existing ISA investments roll over to the next tax year automatically. You do not lose money already invested in ISAs. However, you cannot carry forward unused allowance. If you contribute £12,000 in 2025-26, the unused £8,000 does not add to your 2026-27 allowance.
Strategies
Married couples: Both spouses get £20,000 ISA allowances. A married couple can shelter £40,000 annually. Over 10 years, that is £400,000 growing completely tax-free. When is the end of the tax year for couples? Both spouses must contribute before 5 April 2026 to use current-year allowances.
Transfers between providers: When does the isa tax year end for transfers? If you want to switch ISA providers (e.g., from a low-interest cash ISA to a stocks-and-shares ISA), initiate transfers by mid-March. Transfers can take 15-30 days, and the receiving provider must complete the transfer to count the contribution against your current-year allowance.
Cash vs stocks-and-shares ISAs: You can split your £20,000 across multiple ISA types (cash ISA, stocks-and-shares ISA, innovative finance ISA), but the combined total cannot exceed £20,000. Most high earners maximize stocks-and-shares ISAs for long-term growth, whilst cash ISAs suit emergency funds.
Tax Savings Example
Sarah earns £80,000 and has £20,000 to invest. Without ISA: She invests in a standard brokerage account. Over 20 years, her investments grow to £60,000. She pays 20% CGT on the £40,000 gain (£8,000 tax) plus 33.75% tax on £12,000 dividends received (£4,050 tax). Total tax: £12,050.
With ISA: Sarah invests the same £20,000 in an ISA. Her investments grow to £60,000. She withdraws it tax-free. Total tax: £0. Savings: £12,050.
Action: Use your full £20,000 ISA allowance before 5 April 2026. If married, both spouses should maximize ISAs (£40,000 combined).
Step 2: Optimize Pension Contributions (Deadline: 5 April 2026)
Pension contributions deliver immediate tax relief at your marginal rate plus reduce adjusted income for child benefit and personal allowance tapering. For high earners facing marginal rates of 60% (due to personal allowance withdrawal) or 55% (additional rate plus loss of child benefit), pensions are the most tax-efficient saving vehicle in the UK.
2025-26 Pension Limits
Annual allowance: £60,000 or 100% of your earnings (whichever is lower). This is the maximum you can contribute in a single tax year whilst receiving tax relief.
Carry forward: If you have unused annual allowance from the previous three tax years (2022-23, 2023-24, 2024-25), you can carry forward unused allowance. Many high earners have £180,000+ carry-forward capacity if they made minimal pension contributions in prior years.
Tapered annual allowance: If your “adjusted income” exceeds £260,000, your annual allowance reduces by £1 for every £2 over £260,000, down to a minimum of £10,000. This affects high-earning directors and business owners.
Tax Relief Rates
- Basic rate (20%): £10,000 contribution costs you £8,000 (£2,000 tax relief)
- Higher rate (40%): £10,000 contribution costs you £6,000 (£4,000 total relief: £2,000 automatic plus £2,000 via self-assessment)
- Additional rate (45%): £10,000 contribution costs you £5,500 (£4,500 total relief)
Strategic Pension Planning for Directors
Company directors can contribute via personal contributions or employer contributions. Employer contributions are usually more tax-efficient:
Personal contribution: You pay from post-tax salary. HMRC adds basic-rate relief automatically (25% gross-up). You claim higher/additional-rate relief via self-assessment. Your contribution counts toward your £60,000 annual allowance.
Employer contribution: Your company pays directly into your pension. The company gets corporation tax relief (19% currently, potentially rising). The contribution is not a taxable benefit-in-kind for you. No National Insurance for you or the company. Employer contributions count toward your £60,000 annual allowance but do not require personal earnings to support them.
Example: David is a company director earning £50,000 salary. He wants to contribute £40,000 to his pension.
Personal contribution route: David pays £32,000 from post-tax salary. HMRC adds £8,000 basic relief (£40,000 gross). David claims £8,000 higher-rate relief via self-assessment (total relief £16,000). Net cost to David: £24,000.
Employer contribution route: David’s company contributes £40,000 directly. Company saves £7,600 corporation tax (19% of £40,000). No National Insurance (saving ~£5,000). David receives full £40,000 in pension with no personal tax paid. Net cost to company: £32,400 (after corporation tax relief).
The employer route saves ~£8,000+ compared to personal contributions. When does the tax year end for employer pension contributions? The contribution must be paid by the company before 5 April 2026. Most payroll providers need instructions by mid-March to process in time.
Pension Strategies
Use carry-forward: Check if you have unused annual allowance from 2022-23, 2023-24, and 2024-25. If you contributed £20,000 annually in those years, you have 3 × £40,000 = £120,000 carry-forward capacity. You could contribute £180,000 in 2025-26 (£60,000 current year + £120,000 carry-forward) if you have sufficient earnings or employer contributions.
Reduce adjusted income below £100,000: If your income is between £100,000 and £125,140, you lose your personal allowance (£12,570 in 2025-26), creating a 60% marginal tax rate. Pension contributions reduce adjusted income. Contributing enough to bring adjusted income below £100,000 restores your personal allowance, saving £5,028 in tax.
Example: Emma earns £110,000. She loses her entire personal allowance, paying 60% marginal rate on £10,000 (£6,000 extra tax). If Emma contributes £10,000 to her pension (costing her £6,000 after higher-rate relief), her adjusted income drops to £100,000. She regains her personal allowance, saving £5,028. Net benefit: £5,028 saved for £6,000 contribution = effective tax rate refunded is 84%.
Restore child benefit: If your adjusted income exceeds £60,000, you face the High Income Child Benefit Charge (HICBC). For every £200 over £60,000, you lose 1% of child benefit. At £80,000+ income, you lose all child benefit. Pension contributions reduce adjusted income below £60,000, restoring full child benefit.
Action: Review pension contributions made in 2025-26. If below £60,000 (or your tapered allowance), make additional contributions before 5 April 2026. Directors should use employer contributions where possible. Use carry-forward if available.
Step 3: Harvest Capital Gains Tax Allowances (Deadline: 5 April 2026)
When is end of tax year for capital gains? CGT allowances reset on 6 April annually. The 2025-26 CGT annual exemption is £3,000 per person (reduced from £6,000 in 2024-25 and £12,300 in 2022-23).
Why CGT Harvesting Matters
If you hold investments, property (excluding main residence), or business assets outside ISAs and pensions, gains are subject to CGT:
- 10% (basic-rate taxpayers) or 20% (higher/additional-rate taxpayers) on most assets
- 18% (basic-rate) or 24% (higher/additional-rate) on residential property
CGT harvesting means deliberately realizing gains to use your £3,000 annual exemption. If you do not use the £3,000 exemption by 5 April 2026, it disappears. You cannot carry forward unused CGT allowances.
CGT Harvesting Strategy: Bed and Breakfast
The classic “bed and breakfast” strategy (selling shares on one day and repurchasing the next) no longer works. HMRC’s 30-day rule prevents you from claiming losses or resetting the base cost if you repurchase the same shares within 30 days.
However, you can:
- Sell shares to realize £3,000 gain before 5 April 2026
- Wait 30 days
- Repurchase the same shares after 5 May 2026
This resets your base cost to the current market value, reducing future CGT liability. The 30-day gap means you are out of the market briefly (market risk), but for long-term holders, this is acceptable.
CGT Spousal Transfers
Married couples and civil partners can transfer assets between each other with no CGT. Each spouse has a £3,000 annual exemption. A married couple can realize £6,000 in gains tax-free annually.
Strategy: If you hold shares with £10,000 unrealized gains, transfer half to your spouse before 5 April 2026. Each spouse sells shares to realize £5,000 gain. After applying £3,000 exemptions, each spouse has £2,000 taxable gain (£4,000 combined). Tax at 20% = £800. Without the transfer, you would pay 20% on £7,000 (£10,000 gain minus £3,000 exemption) = £1,400. Spousal transfer saves £600.
When does the tax year start and end for CGT? The tax year runs 6 April to 5 April. Transfers between spouses must complete before 5 April to use current-year allowances. Share transfers can take several days to process, so act by late March.
CGT Loss Harvesting
If you hold investments with unrealized losses, consider selling to crystallize losses before 5 April 2026. CGT losses can be carried forward indefinitely to offset future gains.
Example: John holds shares that cost £20,000 but are now worth £14,000 (£6,000 loss). He also holds other shares with £10,000 gains. If John sells both before 5 April 2026, the £6,000 loss offsets £6,000 of gains. His net taxable gain is £4,000. After his £3,000 annual exemption, he pays CGT on £1,000 (£200 tax at 20%). Without loss harvesting, he would pay CGT on £7,000 (£10,000 gain minus £3,000 exemption) = £1,400. Loss harvesting saves £1,200.
Action: Review investment portfolios for unrealized gains. Sell assets to use your £3,000 CGT annual exemption before 5 April 2026. Consider spousal transfers to double exemptions to £6,000. Crystallize losses to offset gains or carry forward.
Step 4: Review Salary vs Dividend Mix (Deadline: 5 April 2026)
Company directors face a strategic choice: extract profits as salary (subject to income tax and National Insurance) or dividends (subject to dividend tax but no National Insurance). When does the tax year end for dividend planning? Dividends must be declared and paid before 5 April 2026 to use current-year tax allowances.
2025-26 Dividend Tax Rates
Dividend allowance: £500 (reduced from £1,000 in 2024-25). The first £500 of dividends are tax-free.
Dividend tax rates (after allowance):
- Basic rate: 8.75%
- Higher rate: 33.75%
- Additional rate: 39.35%
Optimal Salary-Dividend Mix 2025-26
Most tax-efficient salary for directors: £12,570 (personal allowance threshold) or £9,100 (National Insurance threshold).
Why £12,570? You use your full personal allowance with no income tax. However, National Insurance applies above £9,100 (employee 12% + employer 13.8%). If your company pays £12,570 salary, the employer NI cost is ~£470 annually.
Why £9,100? You pay no employee or employer National Insurance. However, you do not use your full £12,570 personal allowance, wasting £3,470 of allowance. Most directors choose £12,570 salary because the £3,470 additional allowance saves ~£694 income tax (at 20%), outweighing the £470 employer NI cost.
Dividends above salary: Once you have taken optimal salary (£12,570), extract further profits as dividends. Dividends save 25.8% tax compared to salary at higher-rate (40% income tax + 12% employee NI + 13.8% employer NI = 65.8% vs 33.75% + 13.8% = 47.55%).
Year-End Dividend Planning
Review your 2025-26 income: If your total income (salary + dividends + other income) will exceed £50,270 (higher-rate threshold) or £100,000 (personal allowance taper), consider timing dividend declarations.
Scenario 1: Your income is £48,000. You can take £2,270 additional dividends before hitting the higher-rate threshold (£50,270). These dividends are taxed at 8.75% after the £500 allowance. Delaying dividends to 2026-27 pushes them into higher-rate (33.75%), costing 25% more tax.
Scenario 2: Your income is £98,000. If you take £5,000 additional dividends in 2025-26, your adjusted income exceeds £100,000, triggering personal allowance withdrawal (60% effective tax rate). Better to defer dividends to 2026-27 or take them as pension contributions instead.
When does tax year end for dividend declarations? Dividends must be formally declared by the board (or sole director) before 5 April 2026 and paid by 5 April 2026 to count in the 2025-26 tax year. Most directors declare dividends in March. Ensure:
- Board minutes record dividend declaration (date, amount, shares)
- Dividend vouchers issued to shareholders
- Payment made before 5 April 2026 (bank transfer, not just intent)
Action: Calculate your 2025-26 income. If below £50,270, consider declaring additional dividends before 5 April 2026 to use basic-rate tax bands. If approaching £100,000, defer dividends or use pension contributions instead.
Step 5: Utilize Loss Relief (Deadline: 5 April 2026)
Sole traders and partnerships can carry back trading losses to prior tax years or carry forward to future years. When does the tax year start and end uk for loss relief claims? Tax years run 6 April to 5 April. Loss relief claims have strict deadlines.
Trading Loss Relief Options
If your self-employed business makes a loss in 2025-26, you can:
- Carry back 1 year: Offset losses against 2024-25 profits (claim by 31 January 2027)
- Carry back 3 years: For losses in the first four years of trade, carry back up to three years on a FIFO basis
- Offset against other income: Use 2025-26 losses to reduce 2025-26 income (salary, rental income, dividends)
- Carry forward indefinitely: Offset losses against future trading profits
Terminal Loss Relief
If you cease trading in 2025-26, you can carry back terminal losses up to 3 years. This is valuable for sole traders winding up businesses or incorporating (transferring to a limited company).
Example: Michael ran a sole-trader business for 10 years. He incorporates on 1 March 2026, ceasing sole-trader status. His final trading period (6 April 2025 to 1 March 2026) generates a £30,000 loss (due to incorporation costs and wind-down expenses). Michael can carry back the £30,000 loss to 2024-25, 2023-24, and 2022-23, claiming refunds on income tax paid in those years. Potential refund: £12,000+ at 40% tax rate.
Capital Losses on Business Assets
If you dispose of business assets (equipment, property, goodwill) at a loss, the loss can offset capital gains. However, if you transfer assets to your own limited company upon incorporation, no loss relief is available (connected party rules).
Action: If your business made a trading loss in 2025-26, decide whether to carry back (immediate refund), offset against other 2025-26 income, or carry forward. Terminal loss relief applies if you ceased trading. File loss relief claims by 31 January 2027.
Step 6: Make Gift Aid Donations (Deadline: 5 April 2026)
Gift Aid donations to UK charities extend your basic-rate tax band, creating tax savings for higher and additional-rate taxpayers. When does the uk tax year end for Gift Aid? Donations must be made by 5 April 2026 to claim relief in the 2025-26 tax year.
How Gift Aid Works
When you donate £100 to charity under Gift Aid, the charity reclaims £25 basic-rate tax from HMRC (grossing up your donation to £125). If you are a higher-rate taxpayer, you claim an additional £25 relief via self-assessment (total relief £50 on a £100 donation).
Effective cost:
- Basic-rate taxpayer: £100 (no additional relief)
- Higher-rate taxpayer: £75 (25% additional relief)
- Additional-rate taxpayer: £68.75 (31.25% additional relief)
Tax Band Extension
Gift Aid donations extend your basic-rate band. The basic-rate band is £37,700 (£50,270 higher-rate threshold minus £12,570 personal allowance). If you donate £10,000 under Gift Aid (grossed up to £12,500), your basic-rate band extends to £50,200. Income that would have been taxed at 40% is now taxed at 20%, saving 20% on £12,500 = £2,500.
Example: Emma earns £60,000. Without donations, she pays 40% tax on £9,730 (£60,000 minus £50,270 threshold). If Emma donates £8,000 under Gift Aid (£10,000 grossed up), her higher-rate threshold increases to £60,270. She now pays 40% tax on zero income. Tax saved: £4,000. After donating £8,000, her net cost is £8,000 minus £4,000 relief = £4,000 (effective 50% taxpayer funding, 50% charity benefit).
Action: If you donate to charity, ensure donations are made under Gift Aid before 5 April 2026. Higher and additional-rate taxpayers should maximize donations to extend basic-rate bands and reduce tax bills. Claim relief via self-assessment.
Step 7: Transfer Assets to Spouse (Deadline: 5 April 2026)
Married couples and civil partners can transfer assets between each other with no tax consequences. When does tax year end for spousal transfers? Transfers must complete before 5 April 2026 to use current-year tax planning opportunities.
Income-Splitting Strategies
If one spouse is a higher-rate taxpayer and the other is a basic-rate taxpayer, transferring income-generating assets saves tax.
Example: David is a 45% taxpayer. His wife Sarah is a 20% taxpayer. David owns shares paying £5,000 annual dividends. David pays 39.35% dividend tax (£1,968 after £500 allowance). If David transfers the shares to Sarah, she pays 8.75% dividend tax (£394 after her £500 allowance). Tax saved: £1,574 annually.
Property Income Splitting
If you own rental property jointly with a spouse, HMRC assumes 50:50 income split (unless you make a Form 17 declaration). If one spouse is a non-taxpayer, you can transfer property to the non-earning spouse’s name to use their personal allowance and basic-rate band.
Example: Tom owns a rental property generating £20,000 annual profit. Tom is a higher-rate taxpayer (40%). He pays £8,000 tax on the rental income. Tom transfers the property to his wife Jane, who has no other income. Jane uses her £12,570 personal allowance (no tax on first £12,570) and pays 20% on the remaining £7,430 (£1,486 tax). Tax saved: £6,514 annually.
Caution: Property transfers may trigger Stamp Duty Land Tax (SDLT) if there is an outstanding mortgage. Seek specialist advice before transferring mortgaged properties.
Dividend Waivers
If you and your spouse are shareholders in a family company, dividend waivers can redirect income. However, HMRC’s “settlements” legislation may apply if one spouse waives dividends solely to shift income to a lower-tax spouse. This is a complex area requiring professional advice.
Action: Review income-generating assets (shares, rental property, interest-bearing accounts). If one spouse is a higher-rate taxpayer and the other is basic-rate or non-taxpayer, transfer assets before 5 April 2026 to split income and reduce overall household tax.
Step 8: Review Business Expenses and Mileage (Deadline: 5 April 2026)
Sole traders and company directors can claim business expenses to reduce taxable profits. When does the uk tax year start and end for expense claims? The tax year runs 6 April to 5 April. Expenses incurred by 5 April 2026 can be claimed against 2025-26 profits.
Common Overlooked Business Expenses
Sole traders claiming expenses on self-assessment:
- Home office use: Simplified flat-rate (£6/week for 25-50 hours, £10/week for 51-100 hours, £18/week for 100+ hours) or actual costs (mortgage interest, utilities, council tax proportion)
- Business mileage: 45p/mile first 10,000 miles, 25p/mile thereafter (2025-26 rates)
- Professional subscriptions: Industry body memberships, trade associations
- Phone and broadband: Business proportion of bills
- Training and courses: Relevant to current business (not starting a new trade)
- Marketing and website costs: Including domain renewals, hosting, SEO, advertising
- Accounting and legal fees: Tax advice, bookkeeping, Companies House fees
Company directors claiming expenses via limited company:
- Travel and subsistence: Business trips (not commuting from home to regular workplace)
- Hotels and accommodation: For business travel
- Staff entertaining: Christmas parties (£150/employee annual exemption)
- Trivial benefits: Gifts to employees (£50 per gift, not cash, max 6 per year)
- Professional indemnity insurance: For directors and employees
Business Mileage Claims
If you use your personal vehicle for business (not commuting), claim mileage at HMRC’s approved rates:
- Cars and vans: 45p/mile (first 10,000 miles per tax year), then 25p/mile
- Motorcycles: 24p/mile
- Bicycles: 20p/mile
Example: Sarah drives 8,000 business miles in 2025-26. She claims 8,000 × 45p = £3,600. This reduces her taxable profit by £3,600, saving £1,440 tax (at 40%) plus £600 National Insurance (at 9% Class 4) = £2,040 total saved.
If you have not logged mileage for 2025-26, reconstruct journeys using:
- Diary entries and calendar appointments
- Client invoices showing visit dates
- Emails confirming meeting locations
- Google Maps timeline (if location tracking enabled)
HMRC accepts reasonable estimates if exact mileage is unavailable, but contemporaneous records are stronger evidence.
Year-End Expense Timing
If you are considering business expenses (new laptop, office furniture, training courses), making purchases before 5 April 2026 allows you to claim relief against 2025-26 profits. Delaying purchases to April 2026 defers relief to 2026-27.
For sole traders with fluctuating income, claim expenses in the year with the highest profits (highest marginal tax rate). If 2025-26 profits are £60,000 (40% tax rate) and you expect 2026-27 profits to be £30,000 (20% tax rate), accelerate expenses into 2025-26 to save 40% rather than 20%.
Action: Review 2025-26 business expenses. Ensure all allowable costs are claimed before 5 April 2026. Reconstruct business mileage if not logged contemporaneously. Consider accelerating planned purchases if 2025-26 profits are higher than expected 2026-27 profits.
Step 9: Pay Dividends Before Year-End (Deadline: 5 April 2026)
Directors of profitable limited companies should review dividend payments before 5 April 2026. When does tax year start and end for dividends? Dividends declared and paid by 5 April 2026 use the 2025-26 tax year’s £500 dividend allowance and tax bands.
Why Declare Dividends Before 5 April
- Use the £500 dividend allowance: The first £500 of dividends are tax-free in 2025-26. If you do not take any dividends before 5 April 2026, you lose this allowance. Delaying £500 dividends to 2026-27 costs £43.75 tax (at 8.75% basic rate).
- Lock in current tax rates: Future governments may increase dividend tax rates. Declaring dividends in 2025-26 uses current rates (8.75%, 33.75%, 39.35%). If rates increase in 2026-27, you save tax by accelerating dividend extraction.
- Utilize basic-rate bands: If your 2025-26 income is below £50,270 (higher-rate threshold), you can take dividends taxed at 8.75%. If you defer dividends and your 2026-27 income exceeds £50,270 (due to salary increases or other income), you pay 33.75% instead—an extra 25% tax.
Dividend Declaration Compliance
To declare dividends legally:
- Check distributable reserves: Your company must have sufficient retained profits (post-tax). Illegal dividends are treated as loans, triggering tax consequences.
- Hold board meeting (or written resolution): Directors formally declare dividends. Record decision in board minutes.
- Issue dividend vouchers: Provide vouchers to shareholders showing amount, date, tax year.
- Pay dividends: Transfer money from company account to shareholder personal accounts before 5 April 2026. HMRC does not recognize unpaid dividends for tax purposes.
Interim vs Final Dividends
Interim dividends: Declared by directors during the year. No shareholder approval required (for private companies). Most owner-directors use interim dividends for tax planning flexibility.
Final dividends: Declared by directors but require shareholder approval (usually at AGM). Rarely used for small private companies due to administrative burden.
For tax planning purposes, declare interim dividends in March 2026 to maintain flexibility. If company profits change after year-end, you have not committed to final dividends requiring shareholder approval.
Action: Review your 2025-26 dividend payments. If you have not used your £500 dividend allowance, declare at least £500 in dividends before 5 April 2026. If your income is below £50,270, consider taking additional dividends to use basic-rate bands (8.75% tax). Ensure board minutes, vouchers, and payments complete by 5 April 2026.
Step 10: Plan for Self-Assessment Payment on Account (Deadline: 31 January 2027)
When does the tax year end for self-assessment payment deadlines? Whilst the tax year ends on 5 April 2026, tax payments follow different deadlines. Understanding payment on account prevents cashflow surprises in January and July.
Self-Assessment Payment Dates
For the 2025-26 tax year (ending 5 April 2026):
- 31 January 2027: File 2025-26 self-assessment return + pay any balancing payment + first payment on account for 2026-27
- 31 July 2027: Second payment on account for 2026-27
What Is Payment on Account?
HMRC requires you to prepay tax for the following year based on the previous year’s liability. If your 2025-26 tax bill is £10,000, HMRC assumes your 2026-27 bill will also be £10,000. You pay £5,000 on 31 January 2027 and £5,000 on 31 July 2027 (two equal installments).
When you file your 2026-27 return in January 2028, HMRC calculates your actual 2026-27 tax. If it is £10,000, you have already paid it (via the two £5,000 installments). If it is £12,000, you pay the £2,000 balance. If it is £8,000, you receive a £2,000 refund.
Who Pays Payment on Account?
You must make payments on account if:
- Your self-assessment tax bill exceeds £1,000 in the previous year AND
- Less than 80% of your tax was deducted at source (via PAYE or other deductions)
Most sole traders, landlords, and directors with dividend income pay on account.
Reducing Payment on Account
If you expect your 2026-27 income to be significantly lower than 2025-26 (e.g., you stopped trading, reduced working hours, or took a sabbatical), you can reduce your payment on account.
How to reduce: When filing your 2025-26 return in January 2027, claim to reduce payment on account. HMRC’s online form allows you to specify a lower amount. You must reasonably believe your 2026-27 tax will be lower. If you under-estimate, HMRC charges interest on the underpaid amount.
Example: Your 2025-26 tax bill is £20,000 (payment on account due: 2 × £10,000 = £20,000 for 2026-27). However, you plan to take a career break in 2026-27, expecting only £5,000 tax liability. You reduce your payment on account to 2 × £2,500 = £5,000, saving £15,000 cashflow in January and July 2027.
Year-End Planning for Payment on Account
If you know your 2025-26 tax bill will be high (due to capital gains, bonus income, or one-off dividends), plan cashflow for January 2027. You will pay:
- Balancing payment for 2025-26 (any remaining tax owed)
- First payment on account for 2026-27 (50% of your 2025-26 bill)
Example: Your 2024-25 tax bill was £8,000 (paid in January and July 2025). Your 2025-26 tax bill will be £15,000 (due to property sale). On 31 January 2027, you pay:
- Balancing payment for 2025-26: £15,000 minus £8,000 already paid on account = £7,000
- First payment on account for 2026-27: £15,000 ÷ 2 = £7,500
- Total due 31 January 2027: £14,500
This is a significant cashflow hit. Plan by saving monthly or making voluntary tax payments during 2025-26.
Action: Estimate your 2025-26 tax bill. If significantly higher than 2024-25, prepare cashflow for January 2027 (balancing payment plus first payment on account). If you expect lower 2026-27 income, plan to reduce payment on account when filing your return.
When Does the Tax Year End? (Complete Guide)
When does the tax year end? The UK tax year ends on 5 April at 11:59 PM. The current 2025-26 tax year ends on 5 April 2026. The next tax year (2026-27) begins on 6 April 2026.
When does the tax year start and end? The UK tax year runs from 6 April to 5 April the following year. This is fixed and does not change based on weekends or bank holidays. Even if 5 April falls on a Saturday, the tax year still ends that day (not the following Monday).
When does tax year end 2025? The 2024-25 tax year ended on 5 April 2025. When does tax year end 2026? The 2025-26 tax year ends on 5 April 2026.
When is the end of the tax year 2025? If you are referring to the tax year labeled “2025,” UK convention means 2024-25 (ending 5 April 2025). The tax year label refers to the calendar year in which it begins (6 April 2024 to 5 April 2025 is “2024-25”). When does the tax year end 2025? The 2024-25 tax year ended 5 April 2025.
When is end of tax year? The tax year always ends on 5 April. When does uk tax year end? The UK tax year ends on 5 April. When does this tax year end? The current 2025-26 tax year ends on 5 April 2026.
What date does the tax year end? 5 April. What date is the end of the tax year? 5 April every year.
When does the uk tax year start and end? The UK tax year starts on 6 April and ends on 5 April the following year. When does the tax year start and end uk? 6 April to 5 April.
Why does the tax year end on 5th april? The UK tax year ended on 25 March (Lady Day, a traditional quarter day) until 1752. When Britain switched from the Julian calendar to the Gregorian calendar in 1752, 11 days were dropped from the calendar. The government refused to lose 11 days of tax revenue, so shifted the tax year end to 5 April (25 March + 11 days). A further leap year adjustment added one more day, creating the modern 6 April to 5 April tax year.
When is the end of the tax year uk? 5 April annually. When does the tax year end uk? 5 April. When does the uk tax year end? 5 April.
When does the current tax year end? The current 2025-26 tax year ends on 5 April 2026. When does this tax year end? 5 April 2026.
What is the end of the tax year? The end of the tax year is 5 April. This is the deadline for using annual tax allowances (ISAs, pensions, CGT exemptions).
When is tax year end? 5 April. When is the tax year end? 5 April every year. When is end of the tax year? 5 April.
How Acenteus CCA Supports Year-End Tax Planning
Effective year-end tax planning saves thousands of pounds annually, but requires technical knowledge, strategic timing, and compliance expertise. Many business owners leave tax planning to the final week of March, missing valuable opportunities. Others focus on one or two strategies (e.g., ISAs) whilst overlooking higher-value opportunities like pension carry-forward, CGT spousal transfers, or salary-dividend optimization.
Acenteus CCA delivers tax advisory services and year-end planning for UK company directors, sole traders, landlords, and accountancy practices. Our tax specialists identify optimization opportunities, calculate tax savings, and implement strategies before 5 April deadlines.
Year-End Tax Planning Services
Tax efficiency review: We analyze your 2025-26 income (salary, dividends, rental income, capital gains, self-employment profits) and model tax-saving scenarios. Our review identifies which of the 10 strategies in this guide deliver the highest savings for your specific circumstances.
Services included:
- Income and tax liability projection for 2025-26
- ISA and pension contribution optimization
- CGT harvesting and loss utilization strategies
- Salary vs dividend mix modeling for directors
- Spousal income-splitting analysis
- Payment on account planning and cashflow forecasting
- Compliance support (board minutes, dividend vouchers, Forms 17)
Pricing: From £400-£800 for sole traders and landlords; £600-£1,200 for company directors (depending on complexity). We typically save clients 5-10× our fees through tax optimization.
For Accountancy Practices
White-label tax planning for your clients: We deliver year-end tax planning under your firm’s brand. Your clients receive detailed tax efficiency reports with your branding. You retain client relationships whilst we handle technical analysis.
Services for accountants:
- Bulk year-end planning for client portfolios (200+ clients)
- Salary-dividend optimization models for director clients
- CGT and loss relief calculations
- Pension carry-forward analysis
- Payment on account forecasting
Why accountants outsource year-end planning: January to April is your busiest season. Self-assessment deadlines, year-end accounts, and corporation tax returns overwhelm in-house teams. Outsourcing tax planning to Acenteus frees your qualified staff for client advisory work whilst ensuring every client receives year-end optimization. Our UK-supervised team delivers consistent quality at 40-60% less cost than full UK-based resourcing.
Free Tax Efficiency Assessment
We offer complimentary year-end tax efficiency assessments for businesses and accountancy practices. Our assessment includes:
- Review of your 2025-26 income sources
- Identification of unused tax allowances (ISAs, pensions, CGT exemptions)
- Calculation of potential tax savings from year-end strategies
- Priority action list with deadlines
- Implementation support if required
Contact Acenteus CCA today to book your free year-end tax planning assessment. Time is running out—effective planning requires 4-8 weeks before 5 April 2026. Let us maximize your tax savings whilst you focus on running your business.
Frequently Asked Questions (FAQ)
The UK tax year ends on 5 April at 11:59 PM every year. The current 2025-26 tax year ends on 5 April 2026. When does tax year end? Always 5 April.
The UK tax year runs from 6 April to 5 April the following year. When does the tax year start and end uk? 6 April to 5 April annually.
The UK tax year originally ended on 25 March (Lady Day). When Britain adopted the Gregorian calendar in 1752, 11 days were removed. The government shifted the tax year end to 5 April (25 March + 11 days) to avoid losing revenue. Why does the tax year end on 5th april? Historical calendar changes in 1752.
The 2024-25 tax year ended on 5 April 2025. The current 2025-26 tax year ends on 5 April 2026. UK tax years are labeled by their start year (2024-25 means 6 April 2024 to 5 April 2025).
Your existing ISA investments roll over automatically to the next tax year. You do not lose money already in ISAs. However, your annual ISA allowance (£20,000 in 2025-26) resets on 6 April. What happens to isa at end of tax year? Investments remain tax-free; unused allowance expires.
The UK tax year ends on 5 April every year. When does the uk tax year end? 5 April. When is end of uk tax year? 5 April.
5 April. What date is the end of the tax year? 5 April annually. This does not change based on weekends or bank holidays.
No. Unused ISA allowances cannot be carried forward. If you contribute £12,000 in 2025-26, the remaining £8,000 allowance expires on 5 April 2026. It does not add to your 2026-27 allowance.
The annual pension allowance is £60,000 (or 100% of your earnings, whichever is lower). You may also have carry-forward from the previous three tax years if you did not use your full allowance in 2022-23, 2023-24, and 2024-25.
Capital gains tax allowances reset on 6 April annually. The 2025-26 CGT annual exemption is £3,000 per person. Gains realized by 5 April 2026 use the 2025-26 allowance. When is end of tax year for capital gains? 5 April.
The dividend allowance is £500 in 2025-26 (reduced from £1,000 in 2024-25). The first £500 of dividends are tax-free. Dividends above £500 are taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate).
Dividends must be declared and paid by 5 April 2026 to count in the 2025-26 tax year. Dividends declared in March but paid in April count in the 2026-27 tax year. When does tax year end for dividends? 5 April.
Yes. Married couples and civil partners can transfer assets between each other with no capital gains tax or inheritance tax. Transfers must complete before 5 April to use current-year tax planning opportunities. When does the uk tax year start and end for spousal transfers? 6 April to 5 April.
Payment on account is HMRC's system for prepaying next year's tax based on the previous year's liability. You pay 50% on 31 January and 50% on 31 July. When does the current tax year end for payment on account? The 2025-26 tax year ends 5 April 2026, but payment on account for 2026-27 is due 31 January 2027 and 31 July 2027.
You must file your 2025-26 self-assessment return and pay any tax owed by 31 January 2027. This is 10 months after the tax year ends (5 April 2026).
Yes, if you expect your tax liability to be lower next year. When filing your return in January 2027, you can claim to reduce your payment on account for 2026-27. HMRC charges interest if you underestimate.
The capital gains tax annual exemption is £3,000 per person in 2025-26 (reduced from £6,000 in 2024-25). Married couples each have a £3,000 exemption (£6,000 combined).
ISA allowances follow the same 5 April tax year end. When does the isa tax year end? 5 April annually.
Sole traders claim business mileage at 45p/mile (first 10,000 miles) and 25p/mile thereafter via self-assessment. Company directors claim mileage via expense claims to their limited company. When does this tax year end for mileage claims? 5 April 2026—only mileage incurred by that date can be claimed against 2025-26 profits.
Contact Acenteus CCA for a free year-end tax efficiency assessment. We analyze your 2025-26 income, identify unused allowances, and implement tax-saving strategies before 5 April 2026. Our tax specialists serve sole traders, landlords, company directors, and accountancy practices across the UK.
