Pre-Year-End Planning: Setting your business up for success

As the financial year draws to a close, many businesses focus on pulling together their accounts and preparing for compliance deadlines. However, the most successful companies know that effective pre-year-end planning is just as important as year-end reporting itself. By taking a proactive approach in the weeks and months leading up to your year-end, you can optimise your tax position, strengthen your cash flow, and set a clear path for the next financial year.

Why should you be planning your year-end?

• Once your year-end has passed, what has been has been. You cannot go back in time to help manage tax liabilities. It's often too late to make meaningful adjustments.
• You can help prepare yourself for what your tax liability is estimated to be, giving you more time to plan to help pay and manage cash flows – no nasty surprises!
• Year-end planning can help ensure the smooth running of your year-end, which can facilitate tenders, mortgage applications, and improvements to your credit rating.
• Year-end planning and tax planning can ensure we can make the best use of allowances and tax bands available.
• A clear financial picture gives the ability to set realistic budgets and growth targets for the next financial year.

Corporation tax and considerations

• Losses: Are there any earlier-year losses available for use this year?
• Taxable Profits: Are your profits going to exceed 1.5 million, and therefore, payments on account will need to be considered?
• Lower Profits: Does your business qualify for the lower rate of corporation tax by profits being below the £50,000.00 threshold?
• Tax Rate: The main rate of corporation tax for most companies is 25%.
• Pensions: Contributions to staff or directors’ pensions are wholly a tax-deductible expense.
• Directors: Are the directors of the company structuring their pay correctly? Unmanaged drawings can find directors falling subject to an overdrawn loan account, which can be a costly affair!
• Provisions: Have I assessed my stock, bad debt and any bonuses due and provided for them within my accounts?

Personal tax and considerations

• Allowances: Are you utilising all the allowances given to you, such as dividend allowance or savings allowance?
• Working from Home: Are you using your home as an office? Could you qualify for home as office relief?
• Structured Income: Have you structured your income in the most tax beneficial way between salary and dividends?
• Your Spouse’s Income: Does your partner receive a low income? Could you benefit from the Marriage Allowance?
• Exit Strategy: Do you have an exit strategy set up? Planning exits early to make full use of Capital Gains Tax Reliefs.
• Pensions: Have you maximised pension contributions?

Questions you may want to ask yourself:

• Company pension vs. personal pension contribution?
• Bonus vs dividend?
• Capital investments – do you need to make any? Are there any capital allowances you could make use of for these?
• Has my bookkeeper been claiming all allowable business expenses?
• Are you using tax-efficient vehicles through the company?

Tax shouldn’t be about loopholes, it should be about being prepared, planning and being proactive!

How can Pierce help?

Pre-year-end planning is not just about compliance—it’s about taking control of your financial future. Our experienced team can work with you to review your accounts, highlight opportunities, and implement strategies that ensure your business is well-positioned for both tax efficiency and long-term growth.

If your year-end is approaching, now is the perfect time to speak with us. A conversation today could make a significant difference to your bottom line tomorrow.