Start Your New Tax Year on the Front Foot
Post-year-end is a strange time for many business owners. The books are closed, the accounts are nearly done, and yet your tax year is still running until 5 April. What you choose to do between January and March can still change your final tax bill and your cash position for the months ahead.
The key thing to remember is this: your accounting year-end and the tax year-end are two different things. Your accountant may have finalised your company accounts, but HMRC is still looking at your income, dividends and pension contributions right up to 5 April. This gap is a golden window to tidy up the old year and shape the new one.
Plenty of people feel lost at this point. There can be surprise tax bills, confusion about what happens next, rushed dividend decisions and missed pension or loss relief options. Our approach is to give you a personal accountant who is easy to contact, who reviews your position with you, and who helps you adjust things while there is still time.
At NFH Accountancy we alternate between practical guides and real-life experience posts. This time we are firmly in "how to" mode, walking through the key steps for January to March so you can make calm, informed decisions.
Check Your Numbers Before You File and Forget
Once the accounts are drafted, it is tempting to tick the box and move on. We think this is the best moment to slow down, look back, and then look forward. Treat it like a post-mortem on the year just ended.
Useful areas to review with your personal accountant include:
- Profit compared with what you expected
- How close your income is to the basic, higher and additional rate bands
- Whether your personal allowance is at risk of tapering away
- Whether the child benefit threshold is an issue for your family
For company directors, January to March is also the time to check your director's loan account. If your account is overdrawn, or if there are unpaid salary or dividends, there may be extra tax charges if things are not sorted before 5 April.
Add to this a clear view of cash flow. You want to know:
- When your corporation tax is due
- What you owe on 31 January for Self Assessment
- What is realistic for pension contributions or extra dividends
Using cloud accounting like Xero or similar makes this easier. With live data, screen sharing or a short meeting in Horsham, it is possible to walk through the numbers in real time. At the end of this chat, keep a short action list, such as:
- Decide pension top-up by early March
- Confirm dividend amount before 5 April
- Review payments on account after tax is filed
That way you are not making big choices in a last-minute rush.
Use Post-Year-End Pensions to Cut Your Tax Bill
Pension contributions are one of the few levers you can still pull after the books close that can meaningfully change your tax bill. Payments made up to 5 April usually still count for that tax year, which can be very powerful.
For owner-managed companies, there are two main routes:
- Employer contributions from your company
- Personal contributions from you as an individual
Employer contributions can often be deductible for corporation tax, as long as they are "wholly and exclusively" for the business. Your accountant can explain how this works in practice and how the timing around your year-end and tax year-end fits together.
Personal contributions affect your own tax position. Paying more into your pension may:
- Bring your income back into the basic rate band
- Help restore part of your personal allowance
- Reduce the impact of child benefit clawback
There is also the question of annual allowance and any carry-forward from previous years. Before making larger payments, it is sensible to ask your personal accountant to check for:
- Spare allowance from the previous three tax years
- Any tapered allowance if your income is higher
- Any pension input quirks that might catch you out
Setting things up too close to 5 April can cause stress, so it helps to talk early, run a few projections and check the pension move supports your long-term plans as well as saving tax now.
Make Smart Use of Loss Relief and Allowances
Once your accounts are final, any losses become clear. These might be trading losses, investment losses or capital losses, and they can open useful choices in the months after year-end.
If you are a sole trader or in a partnership, key options often include:
- Carrying losses forward to set against future profits
- Carrying losses back to reclaim tax paid in earlier years
- Considering special rules in the early years of a trade
For limited companies, loss relief works differently. Your accountant can explain:
- How trading losses can be carried forward
- When they can be carried back in limited cases
- How group relief works if you have more than one company
Capital losses are another area. Matching them with capital gains can reduce or remove tax. You also have the Annual Exempt Amount for capital gains tax, which you lose if it is not used before the tax year ends.
An adjustable plan is helpful here. If trading improves between January and March, you might choose to carry losses forward. If cash is tight after Christmas, you might prefer to carry some losses back and trigger a repayment from HMRC. Your personal accountant can re-run the numbers as new information comes in and suggest the option that fits best.
Time Your Dividends, Rewards and HMRC Deadlines with Care
Dividends declared between January and 5 April can make a big difference to your overall tax bill. By this point, your accounts usually show your retained profits clearly, so you can see what is safely available.
Things to think about before you declare a dividend:
- Are there enough distributable reserves after the year you just closed?
- Have you used your Dividend Allowance and personal allowance?
- Do you want to stay within your current tax band or plan to step into the next one?
Dividends are only one part of the picture. You might also be looking at extra salary, a bonus or benefits. Extra salary brings National Insurance with it, and might push you into thresholds that affect:
- Child benefit
- Student loan repayments
- Tapering of the personal allowance
The admin side also matters. For each dividend you should have board minutes or a written resolution, dividend vouchers and an up-to-date share register, especially in family businesses where several people may receive income.
On top of this, you have HMRC deadlines in this same period. Key dates usually include:
- 31 January for Self Assessment returns and tax payment
- Late filing penalties and interest from February if you miss that date
- The final days before 5 April for pensions, ISAs, dividends, gains and other reliefs
What happens around 31 January should feed into your planning. If your actual tax bill is lower because income dropped, your accountant may suggest reducing payments on account to ease pressure. If the bill is higher and cash is tight, it may be time to look at a Time to Pay plan sooner rather than later.
Clear, regular communication with a personal accountant makes this far less stressful. It also puts you in a strong position for things like Making Tax Digital and future quarterly reporting, as your cloud-based records are up to date and ready.
Turn Post-Year-End Planning Into a Yearly Habit
The real value comes when you treat January to March as a regular "tax planning season", not just a scramble after the accounts are done. The pattern can be simple:
- Review accounts and personal tax position soon after filing
- Agree pensions, dividends and loss relief moves before 5 April
- Check payments on account and set expectations for the year ahead
At NFH Accountancy in Horsham, our focus is on giving each client a personal accountant who is easy to speak to, who offers proactive reminders and who adjusts the plan as your business and life change. That way, the weeks after year-end feel calm and controlled, not rushed and confusing; and each new tax year starts on the front foot.
Take Control Of Your Finances With Expert Support
If you are ready for clearer numbers and fewer financial headaches, we are here to help. Work with a dedicated personal accountant at NFH Accountancy who will get to know your goals and tailor support around your situation. To discuss what you need and how we can assist, simply contact us today.
