Why October is Critical for Tax Planning
As the UK tax year draws to a close on 5 April 2026, October 2025 represents a pivotal moment for strategic tax planning. With several months remaining before the tax deadline, businesses and individuals have valuable time to implement proactive measures that can significantly reduce tax liabilities and optimize financial outcomes.
Key Tax Deadlines Approaching
- January 31, 2026: Corporation Tax payment deadline for many businesses
- April 5, 2026: End of 2025/26 tax year for individuals and many businesses
- July 31, 2026: Corporation Tax filing deadline for most companies
Strategic Business Tax Planning Strategies
1. Corporation Tax Optimization
With corporation tax rates potentially changing, businesses should consider:
- Accelerating or deferring expenses to optimize timing
- Reviewing capital allowances and tax relief opportunities
- Considering Research and Development (R&D) tax credits
- Evaluating patent box schemes for qualifying IP income
2. VAT Efficiency Reviews
Conduct comprehensive VAT health checks to identify:
- Unclaimed input VAT recovery opportunities
- VAT grouping structures for multi-entity businesses
- International VAT optimization for cross-border operations
- Partial exemption reviews and special methods
3. Making Tax Digital (MTD) Compliance
Ensure systems are fully prepared for digital tax reporting requirements:
- VAT MTD compliance for eligible businesses
- Making Tax Digital for Income Tax Self Assessment (MTD ITS A)
- Software integration and data flow optimization
Personal Tax Planning Considerations
Income Tax Optimization
Individuals should review their tax position for the 2025/26 tax year:
- Personal Allowance utilization (£12,570 for 2025/26)
- Individual Savings Account (ISA) annual allowance (£20,000)
- Pension contributions and tax relief opportunities
- Capital gains tax planning for asset disposals
Investment Planning
Consider tax-efficient investment strategies:
- Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) opportunities
- Offshore investment structures for international diversification
- Non-domiciled tax planning strategies
Inheritance Tax Planning
With the IHT threshold at £325,000 for 2025/26, consider:
- Annual exemption gifts (£3,000 per person)
- Regular gift exemptions
- Trust structures for asset protection
- Business Property Relief for qualifying business assets
- Agricultural Property Relief for farm assets
International Tax Considerations
For businesses and individuals with international connections:
- Double taxation treaty optimization
- Controlled Foreign Company (CFC) rules compliance
- Foreign dividend withholding tax planning
- EU exit-related tax planning for Brexit impacts
Action Steps for October 2025
Immediate Actions
- Schedule a comprehensive tax review meeting
- Gather all financial records and documentation
- Review current tax planning strategies
- Identify potential tax-saving opportunities
Medium-term Planning
- Implement identified tax optimization strategies
- Set up necessary legal structures or investment vehicles
- Review and update succession planning documents
- Plan for year-end tax payments and deadlines
The Importance of Professional Advice
Tax planning is a complex field requiring specialist knowledge of current legislation, upcoming changes, and individual circumstances. Professional advisors can provide tailored strategies that consider:
- Latest tax law developments and proposed changes
- Individual risk tolerance and financial goals
- Interaction between different tax regimes
- Long-term financial planning objectives
Final Thoughts
October 2025 presents a crucial window for proactive tax planning that can deliver significant financial benefits. By taking action now, businesses and individuals can optimize their tax positions, reduce liabilities, and create more favorable financial outcomes for the 2025/26 tax year and beyond.
Don't leave tax planning to the last minute – early preparation is the key to maximizing savings and minimizing stress when tax deadlines approach.