If you want to protect your profits, avoid surprises, and free up more cash in 2026, then it’s time to get serious about tax planning.

For many business owners, tax feels like something that just happens. A bill arrives, and you pay it. But it doesn’t have to be that way. With the right strategy, you can take control, reduce your tax costs, and build a more resilient business.

Step 5 in the Plan, Profit, Prosper planner is about taking a proactive approach. Because when you understand your tax position and plan ahead, everything else becomes easier, from managing cashflow to deciding how to extract profits.

In Step 5 of our Plan, Profit, Prosper series, Michael Carthy covers one of the most overlooked ways to protect your profit: proactive tax planning.

Start With Where You Are Now

Good tax planning always begins with a review.

Look back over the past 12 months. What did you pay in:

• Corporation Tax
• VAT
• PAYE and National Insurance
• Personal tax on dividends and salary

Now ask: could any of that have been reduced with better timing, structure, or use of allowances?

For example, were you late claiming capital allowances? Did your director’s income mix lean too heavily on dividends or salary? These are the types of missed opportunities a proper review will uncover.

Is Your Business Structure Still Working for You?

Tax isn’t just about year-end numbers. It’s also about how your business is set up.

As profits grow and circumstances change, the structure that used to work might not be the most efficient anymore. For limited companies, this includes:

• Reviewing your salary vs dividends mix
• Considering employer pension contributions
• Exploring tax-free benefits or share schemes
• Adjusting director remuneration in line with current rules

Small tweaks in structure can lead to significant long-term savings, especially if planned early.

Use the Reliefs You’re Entitled To

There are plenty of legitimate tax-saving tools available in the UK, but many businesses don’t know they exist.

Make sure you’re making full use of:

• Capital allowances on equipment or assets
• Research & Development (R&D) tax relief
• Investment incentives or super-deductions
• Director pensions
• Electric vehicle schemes or employee benefits

The key is timing. Claiming at the right moment, or deferring certain decisions, can unlock better outcomes and strengthen your cashflow.

Look Ahead. Don’t Just React

One of the most overlooked parts of tax planning is forecasting.

If you know you’re heading for a stronger year in 2026, plan for the tax that will come with it. This way, you’re not blindsided when a bill lands.

Build estimated tax liabilities into your cashflow. Stay aware of changes to tax rules, such as corporation tax bands, dividend allowances, or Making Tax Digital updates. A little foresight now saves a lot of stress later.

Get the Business You Want

Tax doesn’t have to be a headache. It can be a strength. When you plan it properly, you’re not just saving money. You’re improving cashflow, reducing risk, and giving yourself options for growth.

Use Step 5 in the Plan, Profit, Prosper planner to review your position and build your tax strategy.

Want to run a full tax review, forecast your 2026 position, or explore allowances you may be missing?
Get in touch today. Let’s make tax planning a real part of your success.

Start today: Download the planner and take Step 5 now