February Business Update: Year-End Tax Planning Tips from Birmingham Accountants

As trusted accountants in Birmingham, we are here with your February business update – packed with important planning reminders and useful updates for the weeks ahead. From year-end tax efficiency to the Spring economic forecast, here’s what to keep in mind as we approach 5 April.

There’s still time for some year end tax planning

With the tax and financial year end approaching, now is a good time to check that you’re making the most of the reliefs and allowances available. These are just a few of the key areas we are discussing with our clients:

Savings

If you have spare funds, consider maximising your ISA allowances for the 2025/26 tax year (£20,000 per person). Lifetime ISAs are also available for those aged 18–39, offering a 25% government bonus on savings up to £4,000 each year.

Pension planning

Increasing your pension contributions before 5 April 2026 can yield generous tax advantages. For higher earners, this can also mitigate personal allowance reductions, delivering up to 60% in tax savings. Timing is key, and annual contribution limits apply – speak to us for tailored guidance.

Dividends and company loans

Dividend tax rates are increasing in April 2026. Consider whether bringing forward payments this tax year could reduce your overall liability. The same applies to certain shareholder loans – timing matters.

Capital allowances

For businesses with 31 March or 5 April year ends, any new equipment needs to be purchased before the accounting period closes to qualify for allowances.

• You can claim 100% of the cost (up to £1m annually) under the Annual Investment Allowance.

• “Full expensing” relief applies to new equipment purchases by limited companies with no upper limit.

• From 1 January 2026, a new 40% first-year allowance will be available on qualifying assets.

Even equipment bought on hire purchase can qualify, provided it’s in use before year end.

Capital Gains Tax planning

If you haven’t used your £3,000 CGT exemption for 2025/26, consider realising gains before 6 April. CGT rates for Business Asset Disposal Relief and Investors’ Relief are rising again in April 2026 – from 14% to 18%.

Need advice on any of the above? Speak to our team of Birmingham accountants for tailored tax planning support.

Chancellor increases agricultural and business property relief allowance to £2.5 million

In a surprise revision to inheritance tax reforms, the government has announced that full 100% relief from inheritance tax will now apply to the first £2.5 million of qualifying agricultural or business assets – up from the previously announced £1 million.

For couples, this means up to £5 million can be passed on tax-free, in addition to the standard allowances. The relief is transferrable between spouses or civil partners and will come into effect from 6 April 2026.

If you hold qualifying assets, we recommend reviewing your estate plans in light of this major development.

Spring Forecast scheduled for 3 March 2026

Chancellor Rachel Reeves has asked the Office for Budget Responsibility (OBR) to publish a new economic and fiscal forecast on 3 March 2026. While it is not expected to introduce new tax policy, we will be reviewing the full details once they are published.

We will be back in touch with our usual Budget summary after the Spring statement.

MTD for landlords: nearly there!

Making Tax Digital for Income Tax will be mandated from 6 April 2026 for most self-assessment taxpayers earning over £50,000 from property or sole trade income.

Reports show many landlords feel unprepared – but there is still time to act. We can help you choose MTD-compatible software and make the switch with confidence.

If you are concerned about the changes, let us know. We have helped many landlords get ahead of the requirements and would be happy to help you too.

£11 billion lending package to support UK exporters

The government has unveiled a major £11 billion lending package to help British businesses expand overseas. Five major UK banks will offer loans supported by UK Export Finance guarantees of up to 80%.

This could be useful for businesses with international orders or ambitions who need support with upfront costs, bidding processes, or working capital.

If you’re exploring international growth, we can help assess the opportunity and review your current financial position. Let us know if this could be relevant to your business.

Final thoughts

If any of the tax planning points in this update apply to you or your business, please get in touch soon – especially before year-end deadlines in March and April. We’re here to help you make informed decisions and get the most out of your planning.

For more insights or to book a meeting, contact your usual Barnett Ravenscroft adviser or drop us a message here.