Tax planning & year-end review in West London
Make the tax decision while there is still time to change the outcome.
SV&Co helps company directors, sole traders and growing businesses across Southall and West London review profit, tax, dividends, pensions, capital expenditure, director's loans and upcoming liabilities before the relevant deadline passes.
Start with the decision
Which question could still change before the year end?
Tax planning is most useful where there is still a genuine choice.
What Corporation Tax rate am I really paying?
19%, marginal relief or 25% depends on taxable profit, associated companies and the accounting period.
Review profit bandShould I take more money from the company?
Salary, dividend, pension, repayment and director's loan are not interchangeable.
Review extractionShould the company pay into my pension?
Employer contributions can be powerful, but timing and pension limits matter.
Review pensionShould I buy equipment before year end?
First decide whether the business needs it. Then check the capital allowance.
Review purchaseIs my director's loan becoming a problem?
An overdrawn account can create company tax and benefit-in-kind consequences.
Review DLACorporation Tax
The headline rate is not always the rate on the next pound of profit.
For a standalone company with a normal 12-month period, the small-profits rate is 19% up to £50,000 of profit, the main rate is 25% above £250,000, and marginal relief applies between those limits. Associated companies divide the thresholds.
If the company has three other associated companies, the normal £50,000 and £250,000 limits are divided by four, becoming £12,500 and £62,500 for a 12-month period. That can make group structure relevant to year-end planning even where each company looks small on its own.
Salary, dividends & retained profit
Money leaving the bank account needs the right legal and tax label.
A director should not decide “I need £20,000” and label the payment later. Salary, dividends, expense repayments, loan repayments and director's loans have different company and personal tax consequences.
Salary / bonus
Normally deductible for Corporation Tax when the normal remuneration rules are met, but PAYE, employee NIC and employer NIC can apply. Timing and payroll reporting matter.
Dividend
A dividend is not a Corporation Tax deduction. It must come from available company profits and needs proper declaration/minutes and a dividend voucher.
Leave profit in the company
You do not have to extract all post-tax profit. Retained cash may be useful for investment, working capital or future dividends, but personal and company plans should be looked at together.
Pensions
A company pension contribution can reduce taxable profit, but it must be more than a year-end journal.
Employer contributions to a registered pension scheme can normally be deductible where they are made wholly and exclusively for the trade. HMRC's normal timing rule gives the employer deduction in the accounting period in which the contribution is actually paid, subject to specific spreading and anti-avoidance rules.
Simple £20,000 illustration
If a company pays an allowable £20,000 employer pension contribution and would otherwise be taxed at a straight 25% Corporation Tax rate, the simple headline Corporation Tax reduction would be £5,000.
But the company still parts with £20,000 of cash. The £5,000 tax reduction does not make the £20,000 contribution free.
Pension limits still matter
The standard pension annual allowance for 2026/27 is £60,000. Employer contributions count towards the individual's annual allowance.
Carry forward can sometimes increase available allowance, while high income or flexible access to pensions can reduce it. Pension tax limits and investment suitability should be checked before a large contribution.
Equipment & capital allowances
Buy the machine because the business needs it. Then choose the right allowance.
Capital allowances can accelerate tax relief on qualifying plant and machinery. The Annual Investment Allowance remains up to £1,000,000, while companies can also have access to full expensing and the 50% first-year allowance for qualifying new plant and machinery. A permanent 40% first-year allowance has also applied to certain qualifying new main-rate assets from 1 January 2026.
Bad reason to buy
“I will spend £30,000 because it saves tax.”
Even if a full £30,000 deduction produced £7,500 of tax reduction at a straight 25% rate, the business has still spent a net £22,500 after that simple tax effect.
Better question
“We need this £30,000 machine in the next six months. Is there a commercial reason to buy it before the accounting year end, and what allowance is available?”
That is a genuine year-end planning decision.
Director's loan account
Check the balance before deciding on another dividend or withdrawal.
A director's loan exists where money has been taken from the company and it is not salary, dividend, expense repayment or repayment of money previously lent to the company.
Company tax exposure
For loans to participators made on or after 6 April 2026, HMRC's current Section 455 rate is 35.75%. The charge can arise where the relevant loan remains outstanding more than nine months after the end of the accounting period.
The company can later obtain relief when qualifying repayment/release conditions are met, but the timing of the repayment claim can delay the cash coming back.
Personal benefit risk
If a director/shareholder owes the company more than £10,000 at any point, beneficial-loan reporting can also become relevant where sufficient interest is not paid.
Temporary repayment followed by a quick re-borrowing can fall within anti-avoidance rules, so the DLA should be reviewed as a real balance rather than “fixed” for one day.
The owner matters too
A company tax saving can create a larger personal tax cost.
Year-end planning should look at the business and the owner together. Dividend timing, salary, pension contributions, rental income, other employment, interest and gains can all alter the personal result.
£100,000 adjusted net income
The standard Personal Allowance is £12,570. Once adjusted net income exceeds £100,000, it is reduced by £1 for every £2 of excess and becomes nil at £125,140.
That is one reason dividend, pension and personal-income timing sometimes deserves a wider review.
Sole traders
For a sole trader, planning tends to focus on taxable profit, capital expenditure, pension contributions, losses, payments on account, cash reserves and MTD readiness rather than salary/dividend extraction.
The business decision should still come first.
Timing
A useful year-end review has three stages.
60–90 days before year end
- Bring bookkeeping up to date.
- Estimate full-year profit.
- Reconcile director's loan and dividends.
- Forecast Corporation Tax and personal tax.
- Identify genuine decisions still available.
Before the accounting year closes
- Make approved pension contributions where appropriate.
- Complete qualifying purchases where commercially justified.
- Run payroll/bonus decisions correctly.
- Document dividends properly.
- Resolve unusual transactions before they are forgotten.
After year end
- Prepare accounts and tax computation.
- Confirm final tax reserve.
- Plan the next extraction cycle.
- Use the review findings to improve bookkeeping and management information.
- Remember Corporation Tax is normally due 9 months and 1 day after the accounting period.
Interactive tax-planning tools
Use the numbers to decide what deserves a proper review.
Corporation Tax Scenario Explorer
See the simple tax effect of a proposed qualifying deduction. This is designed to stop the common mistake of treating a tax saving as if the underlying expenditure were free.
Year-End Review Checker
Tick what is happening in the business. We will show the subjects worth reviewing before the deadline.
Tax planning FAQs
Planning is useful when there is a real decision, not a magic tax trick.
Should I buy something before year end to reduce Corporation Tax?
Only if the purchase is commercially sensible. If the business genuinely needs the asset, timing can affect the capital allowance and tax year. Spending money purely for a tax deduction normally leaves the business with less cash overall.
Can my company make a pension contribution for me?
Yes, employer contributions to a registered pension can be tax deductible where the relevant trade rules are met. The normal employer tax deduction follows the accounting period in which the contribution is paid. The individual's pension annual allowance and other pension limits still need checking.
Should I take a dividend before the company year end?
The company year end is not automatically the key date for personal dividend tax because personal Income Tax follows the tax year. You also need available distributable profits, correct paperwork and the shareholder's wider personal tax position. Company and personal dates should be considered together.
Why do associated companies matter?
For Corporation Tax marginal relief, the normal £50,000 and £250,000 profit limits are divided by the number of associated companies. A group or multiple commonly controlled companies can therefore reach the higher Corporation Tax bands sooner.
When should a director's loan be reviewed?
Ideally throughout the year and certainly before accounts are finalised. The amount outstanding at the accounting year end, the nine-month repayment window, later drawings, dividends and beneficial-loan rules can all matter.
When is Corporation Tax normally payable?
For companies outside the large-company instalment regime, Corporation Tax is usually due nine months and one day after the end of the accounting period, while the Company Tax Return is usually due 12 months after the period ends.
Reviewed by
Sandip Vadher, PhD FCCA
Founder of SV&Co Accountancy. Fellow Chartered Certified Accountant with more than 20 years of finance and accountancy experience.
Tax Planning & Year-End Review
Bring us the numbers before the deadline, not after.
We can review estimated profit, tax reserve, dividends, pensions, director's loan, capital expenditure and personal tax position and identify which decisions genuinely need action before year end.
Latest management accounts or bookkeeping, estimated full-year profit, company bank balance, director's loan balance, dividends already taken, payroll, pension contributions, planned equipment purchases and other personal income.
Ask for a year-end reviewOfficial sources checked for this draft include GOV.UK/HMRC guidance on Corporation Tax rates and marginal relief, dividends, capital allowances, employer pension contributions, pension annual allowance, director's loans, Personal Allowance taper and Corporation Tax payment deadlines. The live WordPress version will use the SV&Co Official Data Hub for changing numeric values and retain human review for fact-specific planning.