UK tax changes April 2026: 6 urgent money-saving moves before 5 April deadline to slash your tax bill
Accounting firm BDO is urging Brits to take action before the tax year ends on 5 April, with several strategic moves that could slash tax bills and protect wealth.
With just two months until the deadline, tax experts say there’s still time to take advantage of current rules before changes kick in that could cost taxpayers hundreds or thousands of pounds.
Why it matters now
Dividend tax rates are jumping 2% from 6 April, inheritance tax rules are tightening on pensions and business assets, and key thresholds remain frozen. Those who miss these deadlines could be leaving significant money on the table.
“Planning ahead to take account of the changing tax rules in a way that is strategic and futureproof is more important than ever,” said Elsa Littlewood, Tax Partner at BDO.
“With self-assessment now concluded, now is the time to look ahead and consider all income and expenditure to assess where savings or efficiencies can be made.”
The six strategic steps BDO recommends
1. Maximise pension contributions
Taxpayers can claim tax relief on contributions up to £60,000 annually, or 100% of earnings – whichever is lower. Higher and additional-rate taxpayers stand to benefit most, with potential tax rebates of 40-45%.
However, those earning over £200,000 may see their allowance reduced to as little as £10,000 and should seek expert advice, BDO warns.
Taxpayers who don’t receive full tax relief at source should disclose contributions in their annual return to claim a rebate. Returns for 2025/26 can be submitted immediately after April 6 to obtain refunds faster.
2. Avoid the Child Benefit clawback
Child Benefit begins to be clawed back when annual taxable income exceeds £60,000, disappearing completely at £80,000. The High-Income Child Benefit Charge applies at a rate of 1% for every £200 over the threshold.
Making personal pension contributions or salary sacrifice arrangements can reduce taxable income below £60,000, preserving the benefit worth over £2,000 annually for families with two children.
3. Fill National Insurance gaps
Taxpayers can pay voluntary National Insurance contributions for the past six years to fill gaps in their record and boost State Pension entitlement. The deadline is April 5 each year.
BDO advises checking National Insurance records and State Pension forecasts before paying, as voluntary contributions don’t always increase entitlement.
4. Company owners: Consider dividend timing
For company owners, withdrawing profits as dividends rather than salary can be more tax-efficient overall, particularly for basic rate taxpayers, BDO says.
However, dividend tax rates are increasing by 2% from April 6 – the basic rate rises from 8.75% to 10.75%, while the higher rate jumps from 33.75% to 35.75%.
Company owners planning to take dividends should consider bringing them forward into the current tax year if their company has sufficient distributable reserves. BDO notes that company pension contributions remain the most tax-efficient way to withdraw funds from a business.
5. SEIS/EIS/VCT investments for experienced investors
The Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs) all offer substantial tax benefits, but BDO says they’re only suitable for experienced business owners and investors.
SEIS offers 50% income tax relief on investments up to £200,000, while EIS provides 30% relief on up to £1 million (£2 million for knowledge-intensive companies). VCTs offer 30% relief on investments up to £200,000, plus tax-free dividends.
From April 2026, company investment limits will increase, meaning more companies will qualify for these schemes.
6. Review inheritance tax planning
Significant changes to inheritance tax for pensions and business assets are prompting many to rethink how wealth will pass to the next generation, according to BDO.
The firm recommends reviewing wills and letters of wishes to ensure they remain tax-efficient, and considering whether lifetime giving – either lump sums or regular payments out of surplus income – is appropriate.
