Year-End Checklist for Small UK Businesses: Prepare for the Tax Year Ending 5 April 2026

As the UK tax year draws to a close on 5 April 2026, small business owners across Wirral, Merseyside and beyond have a golden opportunity to get their finances in order. Whether you’re a sole trader, partnership, landlord or director of a limited company, acting now can save you time, reduce your tax bill and avoid last-minute stress when Self-Assessment or Corporation Tax deadlines hit. 

At Jan McDermott Chartered Accountants, we’ve helped hundreds of owner-managed businesses navigate year-end with confidence. Our proactive, friendly approach means we don’t just tick boxes; we deliver tailored advice that keeps you compliant and frees you up to grow. This practical checklist is designed specifically for the 2025/26 tax year. Follow it step by step and you’ll head into the new tax year (starting 6 April 2026) with complete peace of mind and numbers you can trust. 

1. Understand Your Deadlines and Business Structure

First, confirm exactly what you need to file and when. The tax year 2025/26 runs from 6 April 2025 to 5 April 2026. 

• Sole traders and partnerships: Your Self-Assessment tax return for 2025/26 is due by 31 January 2027 (online) or 31 October 2026 (paper). Tax owed is payable by 31 January 2027. 
• Limited companies: Corporation Tax returns are due 12 months after your accounting period ends, with payment usually nine months and one day after the period end. If your year-end aligns with 31 March or 5 April, now is the time to finalise accounts. 
• Landlords: Property income is reported via Self-Assessment alongside any trading income. 

Action now: Review your accounting period and note any payments on account due on 31st July 2026 (if applicable). If you’re new to Self-Assessment, register by 5 October 2026 to avoid penalties. 

Pro tip: Cloud accounting tools like Xero (which we’re proud to be certified in) give you real-time visibility, so deadlines never sneak up. 

2. Organise Your Records and Go Digital

HMRC loves accurate, accessible records, and from 6 April 2026, Making Tax Digital (MTD) for Income Tax Self-Assessment becomes mandatory for sole traders and landlords with qualifying trading + property income over £50,000. 

Even if you’re below the threshold, digital records will soon be the norm. Start now: 

• Gather every invoice, receipt, bank statement and expense record from 6 April 2025 onwards. 
• Reconcile your bank accounts, credit cards and any cash transactions. 
• Categorise income and expenses correctly (travel, home office, marketing, etc.). 
• Digitise paper records using apps that link directly to your accounting software. 

Why it matters: Clean records mean faster year-end accounts, fewer HMRC queries and easier quarterly updates once MTD kicks in. We recommend Xero for seamless real-time data access – many of our clients tell us it transforms their finances overnight. 

Action: Run a full reconciliation this month. If your records are messy, our bookkeeping service can quickly bring the up to date. 

3. Maximise Allowable Expenses and Capital Allowances

Every legitimate expense you claim now reduces your taxable profit for 2025/26. 

Review these key areas: 

• Day-to-day expenses: Office costs, vehicle mileage (using HMRC rates), professional fees, insurance, training and marketing. 
• Home office: If you work from home, claim a proportion of utilities, rent/mortgage interest and council tax. 
• Stock and inventory: Value it accurately at the lower of cost or net realisable value. 
• Bad debts: Write off any irrecoverable amounts. 

Capital allowances are changing, so act before 5 April: 

• A new 40% First Year Allowance (FYA) is available for qualifying main-rate assets purchased on or after 1 January 2026 (for both companies and unincorporated businesses). 
• The main rate Writing Down Allowance drops to 14% from 1 April 2026 (Corporation Tax) and 6 April 2026 (Income Tax). 

If you’re planning equipment purchases (machinery, vans, IT hardware), consider bringing them forward to claim the 40% FYA. We can run the numbers to show the exact tax saving. 

Don’t forget R&D tax relief if you’ve developed new products, processes or software – claims can be worth tens of thousands. 

4. Sort Payroll, Benefits and Auto-Enrolment

If you employ staff (or pay yourself via PAYE), payroll year-end is critical: 

• Submit your final Full Payment Submission (FPS) for the tax year. 
• Prepare P11D forms for benefits in kind (due 6 July 2026). 
• Reconcile Class 1A National Insurance. 
• Check auto-enrolment compliance and re-enrolment dates. 

Review director’s loans and ensure any overdrawn loan accounts are cleared or properly documented before year-end to avoid extra tax charges. 

Action: Run your payroll reports now and let us handle P11D and Class 1A submissions if you’d rather focus on your business. 

5. Check VAT,CISand Other Compliance

• VAT-registered businesses: Ensure all returns are up to date. The registration threshold remains £90,000, but if you’re close, consider voluntary registration for input tax recovery. 
• CIS (Construction Industry Scheme): Verify subcontractor deductions and file monthly returns. 
• Corporation Tax: If your company profits sit between £50,000 and £250,000, the marginal relief calculation still applies – we can optimise this. 

Reconcile all tax accounts on HMRC’s portal to spot any discrepancies early. 

6. Complete Your Tax Planning Before 5 April 2026

The clock is ticking on 2025/26 allowances: 

• Pension contributions: Up to £60,000 (or your available annual allowance) can be paid before 5 April for tax relief. 
• ISA allowance: £20,000 per adult – use it or lose it. 
• Capital gains: Use your CGT annual exempt amount (£3,000 for 2025/26) if selling assets. 
• Dividend planning: The £500 tax-free dividend allowance remains, but rates rise from 6 April 2026 (basic rate to 10.75%, higher to 35.75%). Extract profits tax-efficiently before the new tax year if you operate via a limited company. 
• Business Asset Disposal Relief (BADR): Rates increase to 18% from 6 April 2026 for qualifying business sales so consider timing any exit carefully. 

We provide personalised tax planning that’s bespoke to your circumstances; sole trader, landlord or limited company, so you never miss a legitimate saving. 

7. Prepare for Making Tax Digital and the New Tax Year

MTD for Income Tax Self-Assessment starts 6 April 2026 for those over the £50,000 threshold. You’ll need: 

• Compatible software (Xero is fully MTD-ready). 
• Quarterly updates of income and expenses. 
• Final Declaration (The final due on 31 January following the end of the tax year. For the 2026/27 tax year, this means the final declaration is due by 31st January 2028) 

Even if you’re not yet mandated, going digital now future proofs your business. Voluntary MTD sign-up is open and can simplify your Self Assessment. 

Action:  If you need assistance with Xero, we can help. We will implement it, train you and set up automated quarterly reporting. 

8. Review Your Overall Business Health

Year-end isn’t just about compliance – it’s a strategic reset: 

• Produce management accounts showing year-on-year performance. 
• Update cash-flow forecasts and budgets for 2026/27. 
• Consider incorporation or restructuring if your profits have grown. 
• Review insurance, contracts and key financial KPIs. 

Our virtual FD service gives you expert oversight without the full-time cost. 

Why Partner with Jan McDermott Chartered Accountants?

At Jan McDermott, we’re more than accountants, we’re your growth partners. Based in Wirral and serving clients UK-wide, we specialise in small businesses just like yours. Our Xero-certified team delivers real-time financial clarity, proactive tax advice and bespoke packages that save you time and money. 

Don’t leave year-end to chance. Contact us today for a free, no-obligation consultation. We’ll review your records, identify savings and create a custom action plan so you can file with confidence and start the new tax year stronger. 

Call us or request a meeting via our website at janmcdermott.co.uk. Your finances sorted, your business growing, that’s the Jan McDermott difference. 

This checklist is for guidance only and based on current rules as of March 2026. Tax laws can change, and your personal circumstances matter. Always seek tailored advice from a Chartered Accountant. Jan McDermott Chartered Accountants is here to help – get in touch today!