5 business finance moves to make before the end of the tax year

The end of the tax year is your last chance to make financial moves that could save your business hundreds or thousands in tax, boost your cash flow, and set you up for a stronger year ahead. With 5.5 million SMEs in the UK, there are collectively millions of pounds up for grabs for those who act – particularly when it comes to managing seasonal finance and optimising your tax position.

Fortunately, you don’t need to be a financial expert to take advantage of the opportunities before the 5 April tax year. But you do need to act now. Moves like maximising your allowances, claiming tax relief on new equipment, and unlocking cash tied up in unpaid invoices could make a real difference to your bottom line.

In this article, we’ll explore five key strategies to optimise your finances and make sure you’re not leaving money on the table.

Key points:

• The tax year ends on 5 April 2025 so plan early to maximise your savings and avoid last-minute stress

• Act before deadlines to take full advantage of tax-free allowances, capital allowances, and financing options

• Funding Options by Tide can help when optimisation of working capital isn’t enough, offering access to business finance up to £20 million

When is the end of the tax year for UK businesses?

The tax year-end date depends on how your business is structured:  

• Sole traders, partnerships, and individuals: The personal tax year ends on 5 April 2025. This date is the cut-off for self-assessment tax returns and most personal tax allowances  

• Limited companies: A company’s tax year is based on its own accounting period, usually 12 months from the date of incorporation. Many companies choose 31 March to match the UK financial year, but this isn’t compulsory. Corporation tax is due 9 months and 1 day after the end of your accounting period. So for example, if your year-end is 31 March 2025, your corporation tax would need to be paid by 1 January 2026  

It’s a good idea to prepare early for year-end, as accountants, HMRC, and lenders tend to get busier the closer you get to the deadline.

5 seasonal cash flow tips for the end of the tax year

1. Maximise your tax-free allowances

Each year, the government offers a range of tax-free allowances. But if you don’t use them by 5 April, you lose them.

ISAs are a simple way to shelter your savings, allowing you to save up to £20,000 free from income tax, dividend tax, and capital gains tax. If you’re a business owner, that could mean shielding profits you’ve drawn as dividends. Or, if you’re saving for a big purchase – like new equipment or a commercial property deposit – an ISA will keep your money working hard for you.

Bear in mind, you can’t carry over unused ISA allowances. So if you don’t use it by 5 April, it’s gone.

Pension contributions are one of the most powerful tools in your tax-saving arsenal. For every pound paid into a pension, tax relief is available at the highest rate paid. So if you’re a basic-rate taxpayer, you’ll get a 20% top-up from the government. Higher-rate taxpayers can claim an extra 20%, and additional-rate taxpayers can claim an extra 25%. So a £10,000 pension contribution could cost as little as £5,500 for additional-rate taxpayers after all tax relief is claimed.

Pension contributions can be even more effective if you’re a limited company director since your business can contribute directly, reducing its corporation tax bill while boosting your retirement pot.

Note that the annual allowance is £60,000 (or 100% of your earnings, whichever is lower). And if you’ve got unused allowances from the past three years, you might be able to carry them forward – but only if you act before 5 April.

2. Claim capital allowances

If your business has bought (or is planning to buy) equipment, machinery, or vehicles, capital allowances let you deduct the cost of these assets from your taxable profits. With the Annual Investment Allowance (AIA), you can claim 100% relief on up to £1 million of qualifying spending each year.

For example, if you buy a £50,000 piece of machinery within your current accounting year, you could deduct the full £50,000 from your profits. A limited company paying 25% corporation tax could save £12,500. A sole trader in the 40% higher income tax band could save £20,000.

Bear in mind, you need to buy the asset and put it into use before the end of your accounting period to claim the relief that year. So if you’ve been putting off upgrading your tech, replacing a van, or fitting out a new workspace, now may be the time to act.

3. Boost cash flow with smart financing

Cash flow is the lifeblood of any business. But with 69% of SMEs that borrow money doing so to cover cash flow gaps, many businesses struggle to keep money moving. Fortunately, you don’t have to drain your reserves or rely solely on overdrafts. There are other ways to free up cash before the tax year ends.

• Invoice finance: If you’re waiting on unpaid invoices, invoice finance can release a large portion of the invoice value (often up to 90%) soon after it’s issued. And because the finance is secured against your invoices rather than wider business assets, it can be easier to qualify for compared with a traditional loan (only 44% of SME loan applications get approved)

• Revolving credit: A revolving credit facility works a lot like a business credit card – but typically with higher limits and flexible repayment terms. You only pay interest on what you actually spend, which makes it useful for short-term needs like covering a tax bill without locking into a long-term loan

• Tax loans: If you’re facing a large tax bill, a tax loan lets you spread the cost over a number of months. That way, you avoid draining your cash reserves or slowing investment plans just to meet HMRC deadlines

• Secured business loans: for larger, longer-term finance secured against assets.

4. Time your income and expenses for tax efficiency

Timing’s important when it comes to cutting your tax bill. By delaying income or bringing forward planned expenses, you could reduce your taxable profits for this year.

Deferring income until after 5 April could help if you’re expecting a big payment, like a client bonus or a lump-sum invoice. That way, it’ll count towards next year’s tax bill instead of this one – just make sure it won’t leave you short on cash flow.

This can be particularly useful if you’re a sole trader or partnership using cash basis accounting. Under this system, you pay tax on money you’ve received instead of what you’ve invoiced. So if you can push a payment into the new tax year, you push the tax bill with it.

Accelerating expenses (bringing forward planned expenses) like equipment purchases, subscriptions, or staff bonuses can help minimise your tax liability by increasing your outgoings for this tax year.

If you’re a limited company, you could prepay for supplies or services you’ll need in the next few months. That way, you can deduct the cost from this year’s profits, reducing your corporation tax bill.

5. Plan ahead for next year

The businesses most likely to strive are those that plan ahead, so the end of the tax year is a great time to set yourself up for success next year.

Automating your tax savings allows you to avoid the last-minute scramble to pull together the funds you need to pay your tax bill. So consider setting aside a percentage of your revenue every month. Even a small amount like 10-20% can make a huge difference when the bill arrives. You could also open a separate account or savings pot (if your bank allows) just for tax. That way, you shouldn’t be tempted to dip into it for other expenses.

Reviewing allowances regularly will help prevent you from ever missing a tax-saving opportunity. Too many businesses leave their tax planning until the last minute and end up missing out on thousands in relief. By checking your allowances regularly (eg every three months) you can track what you’ve used and what’s left.

Exploring grants and funding now could help give you a head start on growth. For example, if you’re a startup or fast-growing business, schemes like SEIS/EIS or R&D tax credits could provide a valuable cash injection into your business. But they take time to apply for, and competition can be fierce, so it’s important to start early. And if you’re in construction, tech, or manufacturing, look into sector-specific grants – they can provide funding available for training, innovation, and sustainability projects.

If you’re not sure where to look, platforms like Funding Options by Tide can help you find the right funding for your needs.

Find business finance with Funding Options by Tide

Whether you’re looking for a standard business loan, a short-term business loan, or something a little more specialist, like auction finance for property developers, we’re one of the leading names in business finance in the UK, having helped facilitate over £1 billion in finance to more than 20,000 customers.

Checking if you’re eligible is free, only takes a few minutes, and while a full application would impact your personal or business credit score, checking eligibility won’t. Just submit your details via the link below to find out if you could be eligible to borrow up to £20 million.

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FAQs

How can seasonal finance help my business manage cash flow during slower months?

Seasonal finance is designed to help businesses bridge gaps during quieter periods or prepare for peak seasons. Options like revolving credit, invoice finance, or short-term loans can provide the flexibility to cover operational costs, buy stock, or invest in marketing when revenue’s lower. Planning ahead and securing seasonal finance before you need it can help you avoid cash flow shortages and keep your business running smoothly year-round.

Can I carry forward unused allowances?

Most allowances, like ISAs, are use-it-or-lose-it. But pension annual allowances can sometimes be carried forward for up to three years, provided you’ve used the full allowance for the current year first. Capital losses can also be carried forward indefinitely to offset future gains. Always check the specific rules for each allowance, as they vary.

What happens if I miss the 5 April deadline?

If you miss the 5 April deadline, you’ll lose the chance to use that tax year’s allowances. For example, any unused ISA allowance disappears, and you can’t backdate pension contributions. For Self Assessment, the filing deadline is later (31 October for paper returns and 31 January online), but you’ll face penalties if you miss those dates. So it’s worth setting reminders and acting early.

Are business loans tax-deductible?

The interest on business loans is usually tax-deductible as a business expense, which can lower your taxable profits. But the loan amount itself isn’t tax-free – you’ll still need to repay it. If you use a loan to cover a tax bill, the interest may offer some relief by reducing your overall taxable income.

What’s the difference between cash basis and traditional accounting?

Cash basis accounting recognises income and expenses when money actually changes hands. Traditional accounting records them when invoices are issued or bills received. Cash basis is simpler and now available to more businesses, but traditional accounting can give a clearer long-term picture.

Can I use financing to pay my tax bill?

Yes, you can use financing to pay your tax bill. Options like tax loans, invoice finance, and revolving credit could help spread the cost of your tax bill. This can be particularly helpful if you’re experiencing cash flow pressure. Just make sure you compare interest rates and terms to find the right deal.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.