6 LEGAL WAYS TO REDUCE YOUR TAX BILL BEFORE THE END OF THE TAX YEAR

The end of the UK tax year, on 5 April, is steadily approaching, and tax payers across the country will be looking for ways to keep as much revenue as they can in their own pockets, and out of HMRC’s.

Fortunately, there's a window of opportunity for self-employed individuals and business owners to reduce their tax bill with smart, but legal, savings.

But once the deadline passes, many opportunities are gone for good. 

So if you're a business owner, company director, landlord or higher-rate taxpayer, make sure you read this article thoroughly so you can take advantage of these six legal and practical ways below to reduce your tax bill before the end of the tax year.

*Using an accountant can save you serious money! 

Although most self-employed and corporate tax-payers are aware that there are possibilities to claim tax allowances and refunds, many of them fail to do this effectively. 

As shockingly, an estimated 80% of all small businesses still overpay tax, and billions of pounds of corporation tax is overpaid each year by limited companies.

This is why you need an accountant. 

A qualified tax expert can find hidden tax savings that you never even knew existed. Get in touch with us at Sadler Advisory and we’ll show you how to claim back EVERY last penny you’re entitled to.

1. MAKE THE MOST OF YOUR PENSION ALLOWANCES

Pension contributions remain one of the most powerful and tax-efficient planning tools available.

• Contributions receive tax relief at your marginal rate

• Basic-rate relief is added automatically

• Higher and additional-rate relief can be claimed via Self Assessment

You can contribute up to the annual allowance (subject to income limits and tapering rules). If you have unused allowances from the previous three tax years, you may also be able to carry them forward, significantly increasing what you can contribute now.

For company directors, employer pension contributions can be especially efficient, as they are usually deductible for corporation tax and avoid National Insurance.

2. USE YOUR ISA ALLOWANCE, BEFORE IT’S LOST!

Each individual has an annual ISA allowance. If you do not use it by 5 April, it cannot be carried forward.

ISAs offer tax-free interest, tax-free dividends, no capital gains tax on growth.

This makes them ideal for savings and longer-term investing, particularly if you are already using your personal savings allowance or dividend allowance elsewhere. Couples can each use their own allowance, effectively doubling the tax-free shelter available to a household.

3. REVIEW INCOME TIMING AND ALLOWANCES

With careful planning, the timing of income can make a difference.

Examples include:

• Deferring bonuses or dividends into the next tax year (where appropriate)

• Bringing forward allowable expenses

• Ensuring you fully use your personal allowance, dividend allowance, and capital gains annual exemption
  

For company owners, dividend planning before year-end can help keep income within lower tax bands or avoid unnecessary higher-rate tax.

This is an area where personalised advice is especially important, as the right answer depends heavily on your wider income picture.

4. CLAIM ALL ALLOWABLE RELIEFS AND EXPENSES

Many people overpay tax simply because reliefs or expenses are missed.

Before the tax year ends, review whether you can claim:

• Gift Aid donations (which extend your basic-rate band)

• Professional subscriptions

• Use of home for work

• Business mileage and travel costs

• Property-related allowable expenses

Keeping records up to date now makes it easier to submit an accurate return later and avoids last-minute panic.

5. CONSIDER CAPITAL GAINS PLANNING

If you are planning to sell assets, timing matters. You may be able to:

• Use your annual capital gains exemption before it resets

• Transfer assets between spouses or civil partners to use two allowances

• Offset gains with capital losses

With capital gains tax rates now significantly higher than in previous years, proactive planning here can deliver meaningful savings.

6. BRING FORWARD FIXED ASSET PURCHASES

If you are self-employed or run a limited company, bringing forward planned asset purchases before the end of the tax year can reduce your taxable profits.

Examples of qualifying assets include:

• Computers, laptops and monitors

• Office equipment and furniture

• Tools and machinery

• Business vehicles (subject to specific rules)

Most plant and equipment qualifies for capital allowances, which means you can deduct some or all of the cost from your profits when calculating tax.

For many businesses, this can mean:

• Immediate tax relief on the full cost of the asset

• Lower income tax or corporation tax for the current year

• Investing in assets you were going to buy anyway, just sooner

Timing matters. The asset must be purchased and brought into use before the tax year ends to qualify for relief in that year.

It is important to note that not all assets receive the same treatment, and some items (such as cars) have more complex rules. Getting advice before making larger purchases ensures the tax relief matches your expectations and supports your wider business plans.

SMALL ACTIONS ADD UP

Tax planning can be fairly simple and a relatively low-stress task, and taking action before the end of the tax year can reduce your tax bill, improve cash flow and remove stress later in the year.

The key is to plan early and make informed decisions based on your full financial picture. Use our handy tax year-end checklist below to make sure you snap up the most obvious savings.

If you don’t know which options apply to you, speak to us before 5 April and we’ll ensure you are not leaving money on the table.