7 Year-End Checks Every UK Director Should Do (Without the Panic)

If you run a small company, year-end isn’t exciting. It’s admin, deadlines, and that awkward call from your accountant. But here’s the good news: a calm hour with a coffee and the right seven checks can save tax, free up cash, and make next year smoother than this one.

A client put it perfectly to me recently. He said his previous accountant was an “archaeologist” — always digging up the past. That’s the trap at year-end: we look backwards when a few smart moves now change what happens next.

Below are the exact seven checks I use with owners like you. Each is simple, practical, and designed for real life — the kind where you’re spinning sales, staff, and cash flow without a finance team.

1) Pension Contributions (The Big, Boring Win)

If the company’s got spare cash, don’t let it rot in the bank. Company pension contributions reduce your corporation tax bill and grow your future.

Example: Put £10,000 into your pension and your company’s corporation tax falls by roughly £2,500. Personally, you don’t pay income tax or NIC on that contribution either.

Two rules to keep it clean:

• The money must actually leave the company before year-end.

• Don’t overdo it. You’ll still need cash for tax and working capital.

Pro tip: If you can’t put it all into pensions, park surplus cash in a business savings account. Even a modest rate adds up when your working capital moves around each month.

Would you rather build your future… or boost HMRC’s profits?

2) Tax Forecasts (Kill the Surprises)

Most directors only find out their tax bill months after year-end — when it’s too late to do anything about it. I took a call last week: “Can I top up my pension and what’s my corporation tax?” Lovely idea… but their bookkeeping hadn’t been touched for four months.

Modern tools make accurate records easy. Use them.

Ask yourself:

• Are my records actually up to date?

• Do I know my company year-end date (and personal tax year is always 5 April)?

• Can I run a profit & loss today and roughly estimate corporation tax?

• Do I have enough set aside for PAYE and VAT?

• How much working capital will I need over the next 3–6 months?

• Is there room for pension or capex before year-end?

80% of tax stress comes from 20% of surprises — forecasting kills them before they hit.

3) Director’s Loan Account (Avoid the 33.75% Trap)

Let’s demystify it. If you take money from the company that isn’t salary, reimbursed expenses, or a declared dividend, you’re effectively borrowing from the company. That creates an entry called a Director’s Loan Account (DLA).

If the DLA is overdrawn and not repaid within nine months of year-end, the company gets hit with a 33.75% Section 455 charge on the balance. You can claim it back when the loan’s repaid, but meanwhile… that is your cash sitting with HMRC.

It’s not just tax:

• An overdrawn DLA shows up publicly on your balance sheet.

• Lenders and buyers hate seeing it — I’ve watched deals stall until DLAs were cleared.

Smart habit: If you need money regularly, take small, regular dividends (from real profits) rather than dipping in and “sorting it out later.”

A director’s loan isn’t income — it’s debt. Treat it that way.

4) Capital Expenditure (Spend Smart, Not for “Tax Reasons”)

New kit, laptops, a van — bought for genuine business reasons — can qualify for 100% Annual Investment Allowance. Spend £5,000 and you might save about £1,250 in corporation tax.

But here’s the golden rule: only buy what earns or saves more next year.
Don’t buy to reduce tax. Buy to increase profit or replace ageing kit before it breaks and costs you more.

A £5,000 gadget that doesn’t make money isn’t an investment — it’s clutter.

5) Bad Debts, Stock & Housekeeping (Clean the Slate)

If someone definitely isn’t going to pay, write it off before year-end. You’ll tidy your accounts and reduce corporation tax. On accrual VAT, it can reduce VAT too.

True story: we wrote off a £1,000 debtor and two years later got £4.92 from the liquidator. If it’s gone, it’s gone.

Do the same with stock:

• Clear expired or unsellable items.

• Reality check quantities — I once inherited a client whose balance sheet showed £5,000 stock; the real number was £70,000. The tax and cashflow shock wasn’t pretty.

Timing matters, too:

• Income received in advance? Move it to work in progress if the work’s next year.

• Unbilled work you’ve already done? Invoice it. Yes, that can bring tax forward — but clean, honest accounts beat fantasy every time.

If a customer’s gone bust or stock’s gone stale, keeping it on the books won’t bring it back.

6) Dividends (Take Money the Right Way)

Let’s clear the myth: dividends don’t reduce tax — they’re simply how you take profits after corporation tax. The key word is profits.

I see this monthly: “But there was money in the bank!” Sure — but corporation tax still needs paying, and once that’s accounted for, there may be no profit left for dividends. Take too much, and you’ll likely end up with… an overdrawn DLA (see #3).

The clean checklist:

1. Check retained profits after tax.

2. Minute a board decision (even if it’s just you).

3. Pay it properly to your personal account and label it ‘dividend’.

Bonus: mortgage underwriters love seeing clean, labelled dividend movements.

The dividend isn’t the danger — missing paperwork and missing profits are.

7) Plan Ahead (Year-End Is a Reset Button)

Use year-end as a checkpoint, not a deadline. Think:

• Do I need to adjust salary vs dividends based on upcoming rule changes?

• What cash buffer will keep me sane next quarter?

• Is it time to create a holding company or tidy up group structure as we grow?

Small, proactive tweaks now save far bigger headaches later.

Year-end doesn’t end anything — it starts your next 12 months on purpose.

Quick Action Box (30 Minutes)

• Open your accounts: run P&L, debtors, and stock.

• Decide: one pension move, one housekeeping write-off, one capex decision.

• Schedule: a 20-minute forecast meeting with your accountant before year-end.

• List: what you’ll invoice now vs. next year.

• Confirm: dividend paperwork process is watertight.

Final Thought

Year-end will never be glamorous. But it can be calm. Do these seven checks and you’ll pay only what you should, keep more cash in the company, and walk into the new year with far fewer surprises.

If you’d like the simple Year-End Checklist PDF, pop your email in the box below and I’ll send it over. And if you want a deeper dive on Director’s Loans or Dividends, I’ve recorded full breakdowns — worth a listen with a coffee.

Friendly disclaimer

This article is for general guidance only and isn’t personal tax advice. Speak to your accountant about your specific situation.