Tax planning & Self Assessment: Two-Page Guide

Self Assessment: the key dates

A late return costs £100 immediately, then £10 a day after three months (up to £900), with further penalties at six and twelve months. Late tax carries interest at base rate plus 4%.

Making Tax Digital for Income Tax

Since 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC using compatible software. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

Qualifying income is your combined gross turnover from self-employment and property, not profit. Quarterly updates are due by 7 August, 7 November, 7 February and 7 May, with a final declaration by 31 January.

Taking money out of your company

For many owner-directors, a salary up to the personal allowance with dividends on top is still the starting point. But dividend tax rose by 2 percentage points in April 2026, and employer National Insurance is 15% on pay above £5,000. Employer pension contributions are often now the most efficient route: deductible for corporation tax, with no National Insurance.

Ten ideas worth reviewing every year

• Share income with your spouse or partner, for example through shares that carry dividends, to use both sets of allowances and tax bands.
• Make employer pension contributions from the company instead of taking extra salary or dividends.
• Time dividends across tax years to keep income in lower bands.
• Avoid the £100,000 trap. Between £100,000 and £125,140 the personal allowance is withdrawn, an effective 60% rate. Pension contributions and Gift Aid can restore it.
• Claim capital allowances. The Annual Investment Allowance covers up to £1m of plant and machinery a year.
• Check for research and development relief if you solve technical problems in your products or processes.
• Use your annual allowances: the £3,000 capital gains exemption and £20,000 ISA allowance cannot be carried forward.
• Consider an electric company car. The benefit-in-kind rate is 4% in 2026/27, far below petrol or diesel.
• Watch the child benefit charge, which starts at £60,000 of income and takes back all child benefit at £80,000.
• Review inheritance tax plans. Business relief is capped at £2.5m per person, and pensions come into the estate from April 2027.

How we work

1. Annual planning meeting between January and March, before the tax year ends on 5 April, covering the business and the family.
2. Returns prepared early, from the information you send, so you know the tax bill well before 31 January.
3. Making Tax Digital set-up with the right software, and quarterly updates filed for you.
4. We act as your agent with HMRC, dealing with their letters, statements and any enquiries.