If you run a UK limited company, the weeks before your company year-end are one of the few times you can still influence your Corporation Tax position with legitimate, straightforward planning.
After the year-end date passes, the picture is largely fixed. Your accountant can apply the rules, but you’ve lost most of the levers that come from timing and clean records.
This article is a practical checklist of five actions to consider in the final month (ideally the final 4–8 weeks) before your company year-end; focused on what’s commonly relevant for owner-managed businesses.
Who this is for: UK limited companies expecting taxable profits and approaching their accounting period end (whatever month that falls in).
Our Founder, Nick, has also recorded a video on this topic, if you would rather watch.
Year-end checklist (quick summary)
If your year-end is within the next 4–8 weeks, review:
- Director pension contributions (timing is critical)
- Planned business spend (only bring forward what you’d buy anyway)
- Overdue debtors (bad debt reviews and proper write-offs)
- Director/staff expenses paid personally (mileage and reimbursable costs)
- A short year-end planning review (so the basics are done before close)
1) Consider an employer pension contribution (directors)
For many directors, an employer pension contribution is one of the cleanest ways to reduce Corporation Tax while extracting value from the company for the long term.
Why it can be effective
Employer pension contributions are typically treated as an allowable business expense when they’re made for genuine business reasons.
It can be more efficient than taking the same amount as salary (and sometimes more efficient than dividends), depending on your wider position.
Timing matters
To obtain relief in the current accounting period, the contribution usually needs to be paid and received by the pension provider before your company year-end. Paying it “shortly after” can mean it falls into the next period instead.
Consider
- Pension allowances and personal circumstances matter.
- This isn’t investment advice; it’s structural/tax timing planning.
We work with a number of our clients to provide directors remuneration tax planning. We also suggest a joined-up conversation with a Independent Financial Adviser (IFA) who can provide the appropriate investment advice to compliment the tax strategy.
We’ve done a separate blog post on wider owner-managed remuneration considerations ahead of tax year 2026/27: Owner-manager pay in 2026/27: time to review, not repeat
2) Bring forward planned business spend (without spending just for tax)
If you already intend to purchase essential equipment or commit to business software soon after year-end, consider whether bringing the timing forward makes sense.
Typical examples
- laptops and hardware upgrades
- tools/equipment used in the business
- business-critical software or systems you’ve already decided to implement
Why timing can help
You get the operational benefit regardless.
The cost falls into this accounting period, which can reduce taxable profits (subject to the usual rules).
Consider
Some costs are revenue (P&L), some are capital (relief through capital allowances). Treatment depends on what you buy and how it’s used.
Reliefs such as Annual Investment Allowance or full expensing can apply in many cases, but eligibility depends on the asset and facts.
The principle is simple: don’t buy things you don’t need. But if spending is already planned, timing can be worth reviewing.
3) Review overdue debtors (and write off genuine bad debts properly)
Debtors that are unlikely to be collected distort two things:
- your profit, and
- your decision-making.
A year-end debtor review is less about “tax saving” and more about producing accurate numbers you can trust.
When tax relief may apply
If a debt is genuinely irrecoverable and is written off properly in the accounts, the company may obtain tax relief (because the profit is no longer overstated).
Practical approach
- Identify invoices that are significantly overdue (for example, 3–6+ months, depending on your normal terms).
- Decide which are still collectible vs which are realistically bad.
- Keep evidence of reasonable steps taken to recover the debt (emails, reminders, chaser history, escalation).
Consider
“Overdue” isn’t the same as “bad”. Relief generally requires that the debt is genuinely irrecoverable and treated correctly in the accounts, not simply left outstanding.
4) Capture mileage and business expenses paid personally
This is one of the most common missed opportunities in owner-managed businesses.
If directors or staff have paid for business costs personally, the company can usually reimburse them, and those costs may be deductible. Provided they are:
- wholly and exclusively for business, and
- supported by adequate records/receipts.
Common examples
- business mileage claims
- professional subscriptions and licenses
- training that is directly relevant to the role
- small business purchases made personally (with receipts)
- home-working costs (where applicable and correctly applied)
Why it matters
Even modest totals can make a difference. More importantly, it avoids the pattern where legitimate business costs are never recorded in the accounts, leaving profits (and tax) overstated.
Practical tip
In the final month before year-end, do a quick sweep:
- personal card/bank statements (business-coded items)
- email inbox for receipts
- accounting software for missing or incomplete expense claims
5) Do a short year-end planning review (so nothing important is left to accounts prep)
The best year-end corporation tax planning outcomes are usually not about one clever tactic. They come from a short, structured review that ensures the basics are correct before the period closes.
A good year-end planning review typically covers:
- expected profit position and cash position
- director remuneration plan (including pensions where relevant)
- planned spend and whether timing is sensible
- debtor cleanup and any genuine bad debts
- missing expenses and reimbursements
- any one-off items that need attention (bonuses, dividends paperwork, intercompany issues)
Even 30–60 minutes of focused review can prevent the classic problem: discovering opportunities after the year-end date has passed.
Pre-year-end corporation tax planning is something we undertake with every single company client we have. We break the tradition of contacting clients a few months after year-end, or worse, a couple of months before the Companies House filing deadline. There’s lots of accountants talking about being pro-active but it is ingrained in our workflow processes.
We’ve produced a checklist you can download and use ahead of year-end.
Common mistakes we see (and how to avoid them)
- Leaving pension contributions too late (and missing the period)
- Buying spend “for tax” rather than because it’s needed
- Carrying old debtors for months/years and overstating profits
- Directors paying expenses personally and never reclaiming them
- Doing planning after the year-end (when options are limited)
Final thought: don’t wait until the year is closed
If your company year-end is approaching and you expect profits, the final month is a practical window to reduce Corporation Tax legitimately and improve the quality of your numbers.
FAQs
Can I “backdate” a pension contribution to last year?
Generally no. Timing is critical. If it’s paid after the year-end, it will usually fall into the next accounting period.
Does software qualify for capital allowances?
Sometimes, but not always. Many software costs are treated as revenue expenses; other purchases can be capital. The correct treatment depends on the nature of the spend and how it’s used.
When can I claim tax relief for bad debts?
Typically when a debt is genuinely irrecoverable and written off properly in the accounts, with evidence you took reasonable steps to recover it.
What records do I need for expenses paid personally?
Receipts/invoices where possible, a clear business purpose, and a properly documented reimbursement/expense claim process.
This insight is for general information only; and does not constitute formal advice. Always take tailored advice before acting.
