As 5 April 2026 approaches, now is an excellent time to review your finances and ensure you are making the most of available tax reliefs, allowances, and planning opportunities. Taking action early can help reduce tax liabilities, prevent unexpected bills, and improve overall financial efficiency.
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Review Your Income and Plan Cashflow
Income can fluctuate, particularly if you have multiple sources such as employment, self-employment, or rental income. Estimating your 2025/26 income helps you understand your tax band position and whether you may face balancing payments or need to adjust payments on account.
If your income is lower than in 2024/25, you may be able to reduce payments on account. If higher, expect increased payments in January and July 2027. Where fluctuations are expected, speak to your accountant about preparing tax estimates which provide clarity on likely liabilities so you can budget ahead and avoid surprises.
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Understand Your NHS Pension Position
If the growth of your NHS pension exceeds your annual allowance (the standard allowance for 2025/26 is £60,000), you may face a tax charge. The allowance tapers if your taxable income exceeds £200,000, reducing it to a minimum of £10,000.
You can carry forward unused allowances from the previous three years, which may reduce or remove a charge. If a charge is due, the Scheme Pays facility may settle the tax from your pension benefits, although this will reduce your eventual pot. Seek specialist advice, and pass annual allowance statements to your accountant promptly.
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Make Use of the Dividend Allowance
If you receive dividends from a Limited Company, the first £500 is tax-free. Review your distributable reserves and consider whether dividends should be taken before 5 April.
From April 2026, dividend tax rates rise:
- Basic rate: from 8.75% to 10.75%
- Higher rate: from 33.75% to 35.75%
- Additional rate: unchanged at 39.35%
Given the increases, drawing additional dividends within 2025/26 may be beneficial, although your overall remuneration planning strategy should be considered.
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Use Tax-Efficient Allowances
Make sure you utilise the key allowances available:
- ISA allowance – £20,000 tax‑free savings, with interest exempt from income tax.
- Savings allowance – £1,000 for basic rate and £500 for higher rate taxpayers.
- Capital Gains Tax allowance – £3,000, which cannot be carried forward, so plan disposals across tax years where possible.
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Check that your salaries and dividends are sufficient for NHS pension purposes
NHS dentists operating their practice through a limited company should ensure that they have taken sufficient salary and dividends from the company prior to 6 April 2026 to at least match the expected superannuable remuneration for the year.
Total earned income, i.e. salary, from the company plus any other source, must be at least equal to the superannuation paid.
NHS dental associates operating through limited companies are unable to contribute to the NHS pension on their earnings.
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Consider Inheritance Tax Planning
Useful exemptions include:
- Annual gift exemption: £3,000 per year (or £6,000 if the previous year is unused)
- Small gifts: up to £250 per person
- Wedding gifts: £5,000 for a child, £2,500 for a grandchild, £1,000 for others
- Regular gifts from surplus income: fully exempt if they do not affect your standard of living
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Claim Allowable Expenses
Check you are claiming eligible expenses such as professional subscriptions, CPD, training, business mileage, and clinical software.
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Plan Capital Expenditure
The Annual Investment Allowance (AIA) provides 100% relief on qualifying assets up to £1 million. From April 2026, writing-down allowances on non‑AIA items will reduce from 18% to 14%, slowing future tax relief. If you are planning major purchases or building projects, advancing expenditure may be worthwhile.
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Explore Spousal Planning Opportunities
Where one spouse has unused allowances or is in a lower tax band, options include transferring savings or investments, adjusting ownership of income-yielding assets, and considering marriage allowance eligibility.
If you require any further information to enable you to consider your tax efficiency, please get in touch with BHP.
This material is for informational purposes only and should not be relied upon as professional advice.
