How to Start the New Tax Year Right: Smart Tax Planning Tips for 2026/27
With the new tax year beginning on 6 April 2026, it’s the perfect opportunity to reset, review your finances, and put the right tax planning strategies in place from day one.
Many taxpayers focus heavily on year-end planning—but those who take action at the start of the tax year are often in the best position to reduce their overall tax bill.
Here’s how to start the 2026/27 tax year the right way.
1. Review your income and tax position early
The start of the tax year is the ideal time to estimate your expected income and identify potential tax risks.
Ask yourself:
- Will your income push you into a higher tax band?
- Are you close to the £100,000 threshold where the personal allowance starts to taper?
- Could dividend or rental income increase this year?
For 2026/27, the personal allowance remains £12,570, with higher rates applying above £37,700 and £125,140 .
Planning early allows you to take steps throughout the year—rather than reacting too late.
2. Make a plan for dividends and salary
If you’re a company director or shareholder, now is the time to decide how you will extract profits tax-efficiently.
Key considerations:
- The dividend allowance remains low (£500)
- Dividend tax rates have increased in recent years
- Balancing salary and dividends is more important than ever
A clear plan at the start of the year can help avoid:
- Unexpected higher rate tax
- Inefficient profit extraction
- Cash flow issues later in the year
3. Maximise your ISA allowance from day one
For 2026/27, the ISA allowance remains £20,000.
Rather than waiting until the end of the tax year:
- Consider investing early to maximise tax-free growth
- Use ISAs to shelter dividends and capital gains
Remember:
ISA allowances do not roll over—if you don’t use it, you lose it.
4. Plan pension contributions strategically
Pension contributions remain one of the most effective tax planning tools.
Starting early in the tax year allows you to:
- Spread contributions over time
- Manage cash flow more effectively
- Reduce taxable income throughout the year
Higher and additional rate taxpayers can claim further relief, making pensions a powerful way to reduce tax while building long-term wealth.
5. Use allowances across the family
Tax planning shouldn’t be done in isolation.
If you’re married or in a civil partnership, consider:
- Transferring income-producing assets
- Using both personal allowances and basic rate bands
- Making use of the Marriage Allowance where applicable
Family-wide planning can significantly reduce the overall tax burden.
6. Keep better records from the start
One of the simplest ways to avoid HMRC issues is to improve record-keeping from day one.
This includes:
- Tracking business and personal expenses
- Keeping digital copies of receipts
- Monitoring income regularly
Good habits early in the year can prevent:
- Missed deductions
- HMRC enquiries
- Last-minute stress at filing deadlines
7. Review your capital gains strategy
With the CGT annual exemption at just £3,000, planning disposals is more important than ever.
At the start of the year, consider:
- Whether to stagger disposals across tax years
- Using both spouses’ allowances
- Timing asset sales for maximum efficiency
Leaving this until year-end can limit your options.
8. Watch out for common tax traps
Starting the year right also means avoiding common pitfalls:
- Accidentally breaching VAT thresholds
- Triggering the High Income Child Benefit Charge
- Losing your personal allowance above £100,000
- Incorrect expense claims
Early awareness helps you stay in control.
Final thoughts: Planning early makes all the difference
The most effective tax planning isn’t done in March—it starts in April.
By taking action now, you can:
- Spread tax-saving strategies across the year
- Avoid rushed decisions
- Make better financial choices
Need help planning for the new tax year?
At Merranti Accounting, we help individuals and business owners take control of their tax position from the very start of the year.
If you’d like a proactive tax planning review for 2026/27, get in touch with our team today.
