As we near the end of the 2025/26 financial year, now is the perfect time for company directors and finance teams to take stock and put some thoughtful Corporation Tax planning into place.

Good Corporation Tax planning isn’t about avoiding tax. It’s about understanding how UK tax rules work, claiming the reliefs and allowances you’re entitled to, and making decisions that work for your business. 

This guide highlights the main actions to consider before the tax year closes, including tax reliefs and tax rates, allowable expenses, pensions, timing of income and costs and more.

Understanding Corporation Tax rates and relief

Corporation Tax is charged on a company’s taxable profits. For the 2025/26 tax year, the rates are:

Knowing where your profits sit in relation to these thresholds is important. Even small changes to the timing of income or expenditure could make a difference to your Corporation Tax bill.
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A practical guide to Corporation Tax planning for UK Limited Companies

Here are some steps to take when considering Corporation Tax planning before the end of the 2025/26 tax year.

1. Review your Year End profit position

The first step in tax planning for Limited Companies is understanding your projected profits to March 31st 2026. If your profits are too close to the small profits rate or marginal relief thresholds, it’s worth considering whether bringing forward deductible costs or deferring income could reduce taxable profits and lower your Corporation Tax bill.

For example, you might:

• Plan asset purchases that qualify for Capital Allowances.
• Finalise all deductible business expenses.
• Consider Year End accruals and provisions where appropriate.

Be mindful that you must follow proper accounting standards and only claim reliefs and expenses that genuinely relate to the accounting period. 

It’s worth speaking to your Limited Company accountant if you’ve got any questions about what applies.
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2. Claim all allowable business expenses

HMRC allows companies to deduct the genuine costs of running their business from profits before tax. These can include things like staff salaries, rent, office costs, professional fees, and travel and subsistence that are wholly and exclusively necessary for business purposes.

Some business expenses are disallowable for Corporation Tax purposes. For example, most client entertainment must be added back when calculating taxable profits. 

Making sure you claim all allowable costs before the Year End can make a real difference to your Corporation Tax planning.
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3. Consider pension contributions before Year End

For many directors, pension contributions through the company continues to be a highly effective way to manage taxable profits. 

Contributions made through a Limited company to a registered pension scheme before the Year End are generally deductible for Corporation Tax. This can lower your 2025/26 liability while helping build retirement savings for you and your employees.

Key points to remember:

• Tax relief is only given on contributions actually paid in the period, not simply promised.
• Unlike salary, company pension contributions do not attract employer National Insurance, making them a more cost-effective option in many cases.
• You may be able to use carried-forward pension allowances from the previous three years to make higher contributions.

Pensions are a long-term commitment, so take professional advice to make sure any contributions fit with your retirement plans and do not exceed tax limits.

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4. Use Capital Allowances to reduce taxable profits

Capital Allowances are another common tool for Corporation Tax planning. If your company buys qualifying assets (such as plant or machinery) before the end of the accounting period, you may be able to claim the full cost against profits under the full expensing rules introduced in April 2023.

When planning capital allowances, check that any new assets are delivered and ready to use before the Year End so you can claim the relief in this period. Timing any disposals of old assets can also make a difference to the allowances available. 

Keep a record of all purchases and disposals so your claims are easy to support to HMRC. Capital allowances can have a big impact for businesses with significant equipment or other qualifying assets.
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5. Claiming Research and Development (R&D) and other reliefs

If your company undertakes R&D, there may be reliefs or credits available for qualifying expenditure. Research and Development relief can reduce your Corporation Tax or, for some loss-making companies, generate payable credits.

Other reliefs may also be relevant depending on your sector or activities:

Make sure you meet HMRC conditions, deadlines, and documentation requirements before claiming. Proper records are essential to support any relief claimed.
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6. Timing income and expenditure

Timing can make a big difference. Accelerating deductible costs so they fall within the current accounting period or delaying invoicing where commercially appropriate to defer profit into the next period can help.

All timing adjustments must be commercially justified and comply with accounting standards. HMRC will not accept artificial acceleration or deferral purely to manipulate tax.
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7. Reassess director remuneration and dividends

Corporation tax planning often overlaps with personal tax planning. So directors should review how salary and dividends are structured.

Paying a salary up to the personal allowance can be tax efficient, while dividends are often more effective than salary for extracting profits, although they do not reduce Corporation Tax in the same way.

Directors need to balance the company’s cash flow requirements with their own personal tax position. Seeking professional advice is recommended to make sure the approach works for both the business and individual circumstances. 
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8. Make sure you’re aware of any HMRC and Companies House deadlines

Corporation Tax planning is only effective if you meet statutory deadlines. We’ve broken these down below.

Failing to meet these deadlines can lead to penalties,interest charges and avoidable costs. A Year End review well before March 31st can reduce the risk of errors and late filings. 
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9. Make record-keeping part of your tax planning

Good record-keeping is essential. Here are some tips to help make sure your record-keeping is tip-top:

• Retain invoices, receipts, contracts, and board minutes.
• Keep clear records of pension contributions and approvals. 
• Record the commercial rationale for the timing of income and expenditure.
• Set aside a clear record of the tax reliefs you’re claiming, and any related communication with your accountant or HMRC. 

Having a well-organised record makes any HMRC review smoother and reduces compliance risk. 

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10. Get expert advice early

Corporation Tax planning can feel complicated, particularly if you’re a new business owner. With mistakes often being expensive to fix. This is why it’s always important to speak to a qualified accountant (like Crunch!) to get advice before actioning things.

At Crunch, this is exactly why we offer a Tax Optimiser call. Around three months before a client’s Year End, they’re invited to a dedicated one-on-one call with a qualified in-house accountant. During the call, the accountant will review numbers, go through opportunities to reduce your Corporation Tax, and highlight any actions you can still take before it’s too late. 

On average, these reviews identify suggested tax savings of £3,722 per client, although the exact outcome will always depend on individual circumstances. Some clients may see significantly higher suggested savings, including five-figure amounts. The goal is to help you uncover legitimate tax savings, make the most of available reliefs, and plan with plenty of time.

Working with someone qualified can help you model the impact of planning decisions on your tax position, claim reliefs correctly, comply with HMRC requirements, and identify opportunities you might otherwise miss. 

The key is to get advice early, ideally weeks before your Year End, so you can plan calmly rather than rushing decisions at the last minute.
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Your next steps

Smart Corporation Tax planning does not happen overnight. It’s a year-round process that becomes particularly important as each accounting period comes to a close. Take the time now to review your profit position, claim all allowable reliefs and expenses, and make the most of allowances. Doing so will help you manage your taxes efficiently and legally.

If you have not yet started planning for the end of the 2025/26 tax year, now is the time to act. Taking the right steps today can have a meaningful impact on your company’s bottom line in the year ahead.