Self-Assessment Done? Smart Tax Planning Moves to Make in February

Congratulations, you’ve crossed the finish line. The January 31st self-assessment deadline has passed, your return is filed, and that familiar wave of relief has settled in. For many UK taxpayers and business owners, the instinct now is to close the tax file, metaphorically and mentally, for another year.

But what if we told you that the single best moment to reduce your next tax bill isn't next January, it's right now, in February?

The period immediately after filing is a unique window of opportunity. With the previous year's figures fresh in your mind and a full 11 months ahead in the new tax year, proactive planning can be incredibly effective. Here are the smart tax planning UK moves to consider once after self-assessment is done and dusted.

Why February is Your Tax Planning Power Month

Think of tax planning like gardening. January is the hard graft of weeding (filing). February is when you plant the seeds for a better harvest. Acting now allows you to:

• Make informed decisions with a clear view of last year’s income and liabilities.

• Spread costs and investments strategically across the tax year.

• Avoid the year-end scramble where rushed decisions are less effective.

• Maximise allowances before you inadvertently lose them.

Your Post-Deadline Tax Planning Checklist

1. Conduct a "Lessons Learned" Review

Before you move on, spend 30 minutes reflecting on your recent tax return.

• Ask yourself: Was my tax bill higher than expected? Did I have all the necessary records, or was it a last-minute hunt? Did I miss any obvious expenses?

• The Action: This review highlights where your record-keeping can improve and flags if your income is rising into a new tax bracket, signalling a need for more structured planning.

  
  

2. Optimise Your Personal Savings & Investments

Now is the perfect time to ensure your money is working in a tax-efficient way.

• ISA Top-Up: Remember, any unused ISA allowance (£20,000 for 2024/25) does not roll over. February is a great time to plan your contributions for the year ahead.

• Pension Contributions: Increasing pension payments is one of the most efficient forms of tax planning in the UK. Contributions receive tax relief at your highest rate. If last year’s bill was steep, consider setting up regular, increased contributions now to reduce your liability for 2024/25.

• Capital Gains Tax (CGT) Allowance: The annual CGT exempt amount has been significantly reduced. If you hold assets outside an ISA or pension, consider planning disposals to use your allowance (£3,000 for 2024/25) each year.

3. If You're a Business Owner: Start Strategic Planning

For directors of limited companies and sole traders, February is crucial.

• Director's Salary and Dividends: For the 2024/25 tax year, review the most tax-efficient split between a small salary (up to the personal allowance and NIC threshold) and dividends. Setting this early ensures optimal extraction of profits.

• Plan Major Purchases: Thinking of new equipment, a company vehicle, or IT upgrades? Timing these purchases before the end of your accounting year can be beneficial. Under the £1 million Annual Investment Allowance (AIA), you can deduct the full value from your profits before tax, significantly reducing your Corporation Tax bill.

• Set Up a Tax Savings Pot: Based on last year's profits, calculate a rough percentage of your monthly turnover to transfer into a separate business savings account. This builds the cash to pay your future tax bill painlessly.

4. Get Your Record-Keeping Sorted for Good

The stress of January is a powerful motivator. Harness it.

• Go Digital: Use a simple app or cloud accounting software to snap and store receipts on the go.

• Diarise Monthly Admin: Block out one hour a month to reconcile your accounts. Future-you will be eternally grateful.

• Separate Personal & Business: If you’re a sole trader, use a dedicated business bank account. This single step transforms record-keeping.
  

5. Consider Property & Landlord Specifics

If you have rental income, don't neglect it now the return is filed.

• Review Mortgage Interest: With mortgage interest relief now given as a basic-rate tax reduction, structuring your finances efficiently is key.

• Plan for Allowable Expenses: Schedule necessary repairs, safety checks, or energy efficiency improvements. Keep all receipts meticulously for next year’s return.
  

6. Explore the Marriage Allowance & Other Reliefs

A quick check for overlooked reliefs is always worthwhile.

• Marriage Allowance: If one partner earns less than the Personal Allowance (£12,570) and the other is a basic rate taxpayer, you can transfer £1,260 of the allowance. It’s backdatable, but claiming now secures it for the current year.

• Charitable Giving: Ensure any Gift Aid donations are recorded. Higher and additional rate taxpayers can claim extra relief via their tax return.

The Golden Rule: Don't Go It Alone

Tax planning isn't about complex avoidance schemes; it's about understanding the legitimate reliefs, allowances, and timing options available to you. The UK tax system is nuanced, and a small piece of advice can lead to significant savings.

Plan Ahead and Reduce Your 2026 Tax Bill

The relief of submitting your self-assessment is real. But the smartest move you can make is to use that momentum to get ahead. Proactive tax planning after self-assessment is the hallmark of a financially savvy individual or business owner.

At Boobooks Accounting, we believe in turning tax from a source of annual stress into a managed part of your financial strategy. We help our clients look forward, implementing simple, effective plans that maximise their allowances and protect their hard-earned income.

Don't just close the file until next December.

Plan ahead and reduce your 2026 tax bill.