10 Legal Ways a Coventry Accountant Can Reduce Your Tax Bill

Nobody wants to pay more tax than they have to, and the good news is that you don't have to. The UK tax system includes many reliefs, allowances and planning opportunities that are available to anyone who knows where to look. Unfortunately, most business owners and individuals miss out because they only think about tax when a return is due. A proactive Coventry accountant helps you plan throughout the year, so you keep more of what you earn.

Here are ten legal ways to reduce your tax bill in 2026/27.

1. Pay Yourself in a Tax-Efficient Way

If you run a limited company, how you extract money matters. Many directors take a modest salary and top it up with dividends, because dividends avoid National Insurance. Dividend tax rates rose by two percentage points for 2026/27, to 10.75% for basic rate and 35.75% for higher rate taxpayers. That makes it more important than ever to get the balance right, and it is one of the first things a good accountant Coventry business owners use will review.

2. Make the Most of Dividend and Other Allowances

The dividend allowance stays at £500 for 2026/27, so dividends within this limit are taxed at 0%. Spreading income sensibly, for example with a spouse where it's genuine and appropriate, can help you use allowances that would otherwise go to waste.

3. Pay into a Pension

Pension contributions are among the most effective ways to cut tax. The annual allowance is up to £60,000 or 100% of your relevant UK earnings, whichever is lower. Employer contributions from your company are usually deductible against profits too, which can reduce Corporation Tax as well as your personal tax.

4. Claim All Allowable Business Expenses

Many owners forget legitimate costs such as software, professional fees, insurance, travel, training and a proportion of home-working costs. Accurate bookkeeping means nothing gets missed. If your records are messy, Coventry accountants can tidy them up and make sure every valid expense is claimed.

5. Use Capital Allowances

When you buy equipment, vehicles or machinery, you can often claim tax relief on the cost. The Annual Investment Allowance lets businesses deduct up to £1 million of qualifying spending, and companies may benefit from full expensing on certain assets. Timing a purchase around your year end can make a real difference.

6. Claim the Trading and Property Allowances

The trading allowance and property allowance are £1,000 each. If you earn small amounts from a side business or rental income, you may not need to declare or pay tax on it at all, or you may choose to deduct the allowance instead of actual expenses.

7. Use the Marriage Allowance

The Marriage Allowance is £1,260, which lets one partner transfer part of their personal allowance to the other. It only applies where neither partner is a higher or additional rate taxpayer, but it can save a couple a useful amount each year and can sometimes be backdated.

8. Claim the Employment Allowance

If you employ staff, you may be able to reduce your employer National Insurance bill. The Employment Allowance is £10,500 a year. Not every business qualifies, so it's worth checking your eligibility with a Coventry accountant, particularly if your payroll has changed recently.

9. Plan Your Exit with Business Asset Disposal Relief

Selling your business or shares can trigger a large Capital Gains Tax bill. Business Asset Disposal Relief now taxes qualifying gains at 18% on a lifetime limit of £1,000,000. Qualifying conditions are strict, so planning early is essential. The annual CGT exemption is £3,000 for 2026/27, and it's lost if not used, so consider realising gains gradually.

10. Do Year-End Tax Planning

The most valuable step of all is planning before your year end, not after it. That means reviewing profits, timing expenses and investments, using ISAs, and checking you've used every allowance. The ISA allowance is £20,000 in 2026/27 across all your ISAs. Leaving this to the last minute leaves fewer options.

Why Work with Accountants in Coventry?

Tax rules change constantly, and the right strategy depends on your circumstances. Local accountants in Coventry understand the types of businesses in the area, from retailers and landlords to manufacturers and professional services, and can tailor planning to your situation rather than offering generic advice. They also take responsibility for deadlines, so reliefs aren't missed.

Start Planning Today

You don't have to wait for the end of the tax year to start saving. At Cheylesmore Chartered Accountants, our Coventry team helps individuals and business owners build tax plans that are both legal and practical. If you'd like to find out where you could save, book a free consultation today.