While attention is usually on the year ahead this time of year, the more pressing deadline is closer than many realise.
The current tax year ends on 5 April 2026, and several measures from the Chancellor Rachel Reeves’ Autumn Budget are set to take effect immediately afterwards.
For business owners and individuals alike, the first quarter of the year offers a limited opportunity to act under existing rules.
Once April arrives, higher costs and reduced reliefs will leave fewer options available.
Making full use of current allowances
Tax allowances and reliefs are most valuable when used in full. Once the tax year closes, unused allowances are usually lost.
Several thresholds are due to change, making it sensible to review income, gains and pension contributions now rather than later in the year.
A timely review can highlight opportunities to claim reliefs while they remain available and avoid being pushed into higher tax bands unnecessarily.
Managing rising payroll costs
Employers face growing pressure from rising minimum wage and forthcoming changes to Benefit-in-Kind reporting, expected from April 2027.
Planning ahead allows businesses to assess future costs and consider alternative remuneration structures that remain compliant while managing cash flow, without making rushed decisions.
Reviewing shareholdings and business structure
Ownership structures often evolve without a corresponding review of their tax consequences.
A strategic look at shareholdings can help align personal goals with tax efficiency, whether that involves succession planning, future investment or a potential sale.
Early reviews provide greater flexibility and clearer long-term planning.
Utilise investment reliefs before limits change
Tax-advantaged investments continue to play an important role in planning for the future.
ISAs, Venture Capital Trusts, Enterprise Investment Schemes and Seed Enterprise Investment Schemes all offer income tax relief, though limits are due to reduce from April 2026.
Considering these options before the end of the tax year preserves access to reliefs that may not be available in the same form later.
Inheritance Tax changes demand early thought
Inheritance Tax planning has become more complex following announcements that pension funds will be brought within scope, alongside reforms to Business and Agricultural Property Relief.
These changes will affect many estates that previously fell outside the tax net, so it’s important to review strategies now to make use of reliefs or alternative measures to protect your assets.
Asset disposals and reliefs under review
The Business Asset Disposal Relief rate is set to rise by another four per cent from April 2026, reaching 18 per cent.
This places greater importance on the timing of share or asset sales for business owners considering an exit.
There remains time to benefit from the lower rate, though only where disposals are planned carefully and in advance, so seek professional advice as soon as possible.
Employee ownership trusts and exit planning
Employee Ownership Trusts have become a popular exit route, though changes to Capital Gains Tax have altered the balance for some businesses.
Existing exit plans may need revisiting to confirm whether an EOT still delivers the intended outcome.
An early-year review allows time to adjust plans if required.
Using the first quarter wisely
Tax planning works best when undertaken with time to consider options and implement changes properly.
January is the start of a short but valuable window to review finances before new rules take effect.
Decisions taken before 5 April 2026 will shape financial outcomes long after the new tax year begins.
For more advice and information, please contact Lamont Pridmore on 0800 2346978 or email info@lamontpridmore.co.uk
