No.1 Tax Tip for Business Owners in 2025

Every year, I see business owners facing the same painful situation. January rolls around, and suddenly, there’s a looming tax bill they haven’t prepared for. The amount feels overwhelming, and worse still, they have to take more money from their business—creating a cycle that makes next year’s tax bill even harder to manage.

If this sounds familiar, don’t worry—you’re not alone. But there’s a simple way to avoid the stress altogether.

Imagine I told you I could reduce your tax bill from £15,000 to £10,000. You’d feel great, right?

Well, in my experience, probably not. Why? Because if you haven’t saved a penny towards that £15,000 in the first place, you’re still left scrambling to find £10,000. The problem didn’t disappear—it just got a little smaller.

The real issue isn’t the tax bill itself. It’s the lack of planning. And that’s something you can change.

Here’s the simple truth: you need to tax yourself.

From this tax year forward, every time you take money from your business, you should treat tax as a mandatory expense—not an afterthought. The key is to set up a tax provision system that works automatically, just like PAYE employees have their tax deducted before they ever see their wages.

Here’s how to do it in three simple steps:

1️⃣ Fix Your Monthly Drawings – Treat your salary like an employee’s paycheck. Decide on a fixed amount to take each month so you can create a predictable routine. If business is thriving, you can always pay yourself a quarterly bonus.

2️⃣ Estimate Your Tax Liability – Ask your accountant to forecast your personal tax based on your drawings. This is a quick and easy calculation that gives you a clear monthly savings target.

3️⃣ Automate Tax Savings – Every time you take a dividend:
✅ Transfer the money from your company account to your personal account.
✅ Immediately move a portion of it into a savings account for tax.
✅ Set up a standing order to make this effortless and even earn a little interest on your tax savings.

I know what you’re thinking:
“This makes sense, but I’m already behind on my taxes—how can I catch up and start saving for the future?”

Yes, it’s harder to implement when you’re already in a hole. But the longer you wait, the worse it gets. The best approach is to start fresh from the next tax year while gradually catching up on past liabilities. Your accountant can help you create a repayment plan that won’t cripple your cash flow.

Two years ago, we introduced a free dividend tax planning session for all new clients, and the results have been incredible. Clients who follow this approach feel more in control of their finances and no longer dread tax season.

A bit of planning now means zero stress next January. You won’t have to scramble for cash, take last-minute dividends, or risk missing payment deadlines. Instead, you’ll know the funds are already set aside.

And sure, when the tax bill is finally due, "you might feel a slight sting… but that’s just pride… with you."

(Bonus points if you know the movie! 😉)

If you’re not sure how much to set aside or need help forecasting your tax, speak to your accountant—we do this for a living!

And if you’re ready to stop the January tax panic for good, get in touch. We’ll help you set up a system that ensures you’re always prepared—no surprises, no stress, just good financial planning.