Tax-Saving Tips For Manchester Businesses 2025

Whether you’re self-employed or running a limited company, there are several ways to legally reduce the amount of tax that you pay. Below we have outline five of the most effective tax-saving tips to help you completed your 2026 accounts or tax return.

5 Tax-Saving Tips for Manchester Businesses & self-employed

1. Claim All Allowable Business Expenses

A taxpayer is entitled to claim business expenses that are “wholly and exclusively” for your business. Such expenses can include the following, stationary, advertising, subscriptions, and even a percentage of home office costs if you work from home. Including all allowable expenses will reduce your taxable profits, saving you on tax.

Key Tip: Accurate records of receipts and invoices throughout the year, all too often clients ignore this and forget to make a genuine claim.

2. Annual Investment Allowance (AIA)

AIA allowance allows a taxpayer to deduct 100% value of a new assets, this can include assets such as a computer, plant or machinery. Currently for 2025/2026 the AIA limit has remained the same at £1 million, meaning you can claim up to this amount each year.

Key Tip: If you are planning on purchasing equipment for your business, it might be worth doing so before the end of the tax year to maximize tax savings.

3. Take Advantage of Pension Contributions

Contributing to a pension can be an excellent way to save on your tax bill whilst contributing to your retirement pension pot. The effect that pension contributions have is that it reduces your taxable income saving you on tax.

Key Tip: For sole trader, pension contributions are particularly beneficial if you are in a higher tax bracket, as you can claim tax relief at your marginal rate of income tax. Whereas a director any contributions will attract tax savings.

4. Dividend Allowance

If you are a director of a limited company, paying yourself via dividends rather than salary can be a tax-efficient strategy.

• Dividend tax rates are lower compared to income tax.
• There is a dividend free allowance, of £500 of dividend income is tax-free in the 2025/2026.
• Above this amount, dividends are taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate), which is still lower than the equivalent income tax rates.

Key Tip: Be sure to balance your salary and dividends to optimize your tax position.

5. Make Use of Capital Gains Tax Allowances

Sole traders who sell business assets, shares, or property may be liable for Capital Gains Tax (CGT) on the profits. To minimize your CGT liability, a taxpayer needs to think about the timing of the gift in the context of where we are in the tax year. The tax free CGT allowances still remains at £3,000, so be sure to make use of this allowance.

Key Tip: Save tax by gifting assets to your spouse or civil partner by utilize their personal allowance and make use of this allowance by spreading the sale of assets over multiple tax years.