New Tax Year Checklist: What Small Businesses Should Review Each April

Why April matters more than January

The UK tax year runs to 5 April, and 6 April is when the rules move: tax bands, National Insurance thresholds, dividend and capital gains allowances, minimum wage rates and pension limits are all typically set or changed from that date. Personal allowances that were not used in the old year are, for the most part, gone for good.

That makes early April the single best moment in the calendar to spend an hour reviewing how your business and your own pay are set up. Decisions made in April apply for twelve months; the same decisions made in the following March are largely too late.

Directors: review your salary and dividend mix

If you run a limited company, the tax-efficient combination of salary and dividends depends on the year’s National Insurance thresholds, income tax bands, the dividend allowance and corporation tax position — all of which can move each April. A mix that was optimal last year may quietly cost you money this year.

• Reset your director’s salary against the new NI and income tax thresholds
• Plan the year’s dividends against the current dividend allowance and your other income
• Check whether your spouse’s or fellow shareholders’ positions have changed
• Consider whether employer pension contributions should take a bigger share of extraction this year

This is a fifteen-minute conversation with your accountant each April — and one of the highest-value conversations of the year.

Employers: payroll year-end and new rates

April is payroll’s busiest corner. The old year has to be closed off correctly and the new year opened on the right numbers.

• Submit your final Full Payment Submission for the old tax year
• Give every employee a P60 by 31 May
• Apply the new National Minimum Wage and National Living Wage rates from their start date — underpayment penalties and public naming apply even for accidental breaches
• Update payroll software with the new tax codes and NI thresholds
• Check auto-enrolment pension contributions against the new earnings bands
• Diarise P11D reporting for any benefits in kind by 6 July

Allowances, pensions and personal planning

Several personal allowances run tax year to tax year, so April is when the clock restarts. ISA allowances reset — money you shelter early in the year earns tax-free returns for longer than money added in March. Pension annual allowances refresh, and reviewing contributions in April lets you spread them across the year rather than scrambling to use the limit at the end.

April is also the natural point to review capital gains plans for the year ahead, charitable giving under Gift Aid, and whether family members’ allowances are being used sensibly across the household.

Housekeeping: MTD, VAT and the year ahead

Finally, check your compliance position for the new year. Is your turnover approaching the VAT registration threshold? Are you within scope of Making Tax Digital for Income Tax as the rollout continues, and is your bookkeeping software ready for quarterly updates? Are your prices, contracts and budgets updated for the year’s cost changes?

Bayar Hughes & Co has walked local businesses through every April since 1991. From our office in New Eltham, London SE9, we run this checklist with clients as standard — new salary levels, dividend plans, payroll year-end and MTD readiness, all handled in one review. Call +44 7441 347796 to book yours before the new tax year settles in.