The 2025/26 tax year runs from 6 April 2025 to 5 April 2026, and the year-end is fast approaching. Now is the perfect time to review your finances and make the most of allowances and reliefs to reduce your tax liability. Careful planning can make a real difference to both individuals and business owners.

Here are some key areas to focus on:

1. Maximise Your Personal Allowance

For 2025/26, the personal allowance remains £12,570. If your income exceeds £100,000, this allowance gradually reduces, disappearing completely at £125,140.

• Couples may benefit from the Marriage Allowance, allowing one partner to transfer £1,260 of their personal allowance to the other, potentially saving up to £252 in tax.
• Review your income distribution between partners to make the most of these allowances.

2. Salary vs Dividends for Company Directors

Directors can reduce tax by optimising the mix of salary and dividends.

• The dividend allowance for 2025/26 is £500, with anything above this taxed at the relevant dividend rate.
• Combining salary and dividends carefully can maintain tax efficiency and maximise pension contributions.

3. Use Your ISA Allowance

You can contribute up to £20,000 into an ISA this tax year, tax-free.

• Stocks & Shares ISAs offer potential growth without capital gains tax.
• Cash ISAs shelter interest income from tax.

4. Pension Contributions

Contributing to a pension remains one of the most effective ways to reduce taxable income.

• The annual allowance is £60,000 or 100% of your earnings (whichever is lower).
• Contributions can be made personally or via your business, reducing both income and corporation tax liability.

5. Capital Gains Tax Planning

The Capital Gains Tax (CGT) annual exempt amount is £3,000 for 2025/26.

• If you plan to sell assets such as shares or property, spreading gains over two tax years can help maximise exemptions.
• Transfers between spouses/civil partners can further reduce taxable gains.

6. Claim Available Business Reliefs

Several reliefs can reduce business tax:

• R&D Tax Relief – for qualifying innovation projects.
• Annual Investment Allowance (AIA) – up to £1,000,000 for qualifying plant and machinery.
• Business Asset Disposal Relief – reduces CGT to 10% on qualifying business sales.

7. Inheritance Tax Planning

You can gift up to £3,000 per year without it being added to your estate. Small regular gifts from income can also be exempt.

• Early planning is key for those with larger estates to reduce Inheritance Tax exposure.

Final Thoughts

Tax planning isn’t just a year-end chore — acting before 5 April 2026 can save significant amounts and put you in a stronger financial position for the future.

At Crouchers Ltd, we help both individuals and business owners plan effectively, stay compliant, and maximise available allowances.

👉 Contact us today to get tailored advice before the tax year closes.