What Limited Company Directors Should Be Doing Now for Tax Planning

The start of a new tax year isn’t just a compliance reset – it’s a strategic opportunity. 

For limited company directors, April is the ideal time to get ahead of tax liabilities, optimise remuneration, and put systems in place that make the rest of the year smoother (and more profitable).

Here’s what you should be focusing on right now.

1. Review Your Salary & Dividend Strategy

The new tax year means new allowances – and potentially new tax planning opportunities.

For most directors, the optimal structure still involves:

• A low salary (typically around the NIC threshold to preserve state benefits)
• The remainder taken as dividends

However, this should not be ‘set-and-forget’.

Key considerations:

• Personal circumstances (other income, spouse involvement)
• Profit expectations for the year
• Personal income needs

If last year’s profits were inconsistent, now is the time to reset your monthly drawings strategy rather than repeating mistakes.

2. Plan for Corporation Tax Early

With corporation tax rates now split (19%–25%), many companies fall into marginal relief territory.

That means:

• Your effective tax rate may not be obvious
• Small increases in profit can have a disproportionate tax impact

Actions to take now:

• Forecast your annual profit early
• Consider timing of expenses and investments
• Avoid surprises 9 months after year-end

Good business and tax planning here often saves more tax than last-minute “year-end scrambling”.

3. Maximise Allowances From Day One

April resets a number of key allowances. The earlier you use them strategically, the better.

Key areas:

• Annual Investment Allowance (AIA) – for equipment, tools, vehicles (where applicable)
• Pension contributions – highly tax-efficient extraction method
• Trivial benefits / staff perks

Don’t wait until March. Spreading decisions across the year improves cash flow and tax efficiency.

4. Get Your Bookkeeping & Systems Right

If your records were messy last year, now is your clean slate.

At a minimum:

• Ensure Xero (or equivalent) is fully up to date
• Separate personal and business transactions properly
• Implement monthly reconciliations

Why it matters:

• Better visibility = better decisions
• Better data = better forecasting and planning opportunities 

5. Review Director Loan Accounts (DLAs)

If you’ve taken money out of the business outside of salary/dividends, this needs attention early.

Risks include:

• Section 455 tax charges
• Personal tax implications
• Cash flow pressure later

A proactive repayment or restructuring plan now avoids costly issues later.

6. Set a Clear Profit & Cash Flow Plan

Too many directors “see what happens” during the year.

Instead:

• Set a target profit
• Map expected income and costs
• Build in tax provisions monthly

Treat tax like a monthly expense, not an annual shock.

7. Consider Whether Your Structure Still Works

The new tax year is the perfect time to ask:

• Should profits be retained or extracted?
• Is a group structure worth considering?
• Would bringing in a spouse/shareholder improve tax efficiency?

Final Thoughts

The directors who get the most value from their accountant aren’t the ones who just file accounts—they’re the ones who plan early and act deliberately.

If you start the tax year with:

• A clear remuneration strategy
• Accurate bookkeeping
• A profit plan

…you’ll not only reduce tax, but run a far more controlled, profitable business.