February and March are often strange months in business.
The January Self Assessment rush has passed. Spring trading has not quite arrived. And for many businesses and franchises, there is a brief window to pause and think strategically.
But from a tax perspective, February is one of the most important months of the year.
With the tax year ending on year-end for many businesses, there is still time to make informed, proactive decisions. Leave it until May and those opportunities disappear.
For franchisees, tax planning is rarely just about tax. It is about cash flow, personal income, future growth and protecting what you are building. And because franchising has its own commercial structures, generic advice often misses key opportunities.
Here is what we recommend reviewing now. However, we always recommend that you speak to your accountant for expert and up to date advice before making any decisions. Don’t have an accountant? Speak to us.
For limited companies, the balance between salary and dividends should be reviewed before the end of every tax year.
The optimal structure can change depending on:
Many businesses set a structure at the start of the year and do not revisit it. But if profits are stronger than expected, or lower than forecast, adjustments may be sensible before year-end.
This is particularly important for:
A review now allows you to extract profits efficiently while keeping future growth plans in mind.
Pension contributions remain one of the most effective ways to reduce corporation tax and personal tax exposure.
For businesses operating through limited companies, employer pension contributions can:
February is the right time to assess:
For many businesses, pensions are overlooked because growth feels more urgent. But building personal financial security alongside business growth is part of responsible ownership.
Timing matters.
If you are planning legitimate business expenditure in the next few months, consider whether bringing it forward before the year-end makes sense.
Examples might include:
The key is commercial justification, not tax-driven panic spending. But if expenditure is already planned, accelerating it can reduce this year’s taxable profits.
Franchisees often have predictable marketing cycles or seasonal peaks. Aligning tax planning with those cycles is far more effective than reacting after year-end.
If you are considering purchasing equipment, vehicles, or technology upgrades, the capital allowance position should be reviewed carefully.
Items might include:
Understanding whether Annual Investment Allowance or other reliefs apply can significantly affect your tax position.
For franchisees expanding capacity ahead of a busy spring or summer period, this is particularly relevant. But purchases should be commercially justified and cash flow tested.
Tax relief is valuable. Cash flow stability is essential.
VAT planning is rarely glamorous, but it is critical.
February and March is a sensible time to review:
Franchise businesses often have regular outgoing royalty costs. The timing of VAT recovery and payment can have real cash flow consequences.
Small structural adjustments now can improve liquidity heading into the new tax year.
If you are in your first year or early stages of trading, losses are not a failure. They are part of the investment phase.
The key question is how those losses are utilised.
Depending on structure and circumstances, losses may be:
Too often, new franchisees focus solely on operational growth and overlook tax optimisation in the early years.
Getting this right at the outset can significantly improve long-term financial efficiency.
Directors’ loan accounts can quietly become problematic if not reviewed regularly.
Common issues include:
February is the ideal time to review your position and correct any imbalances before the year-end.
Left unchecked, director loan issues can create unnecessary tax charges and compliance complications.
While immediate deadlines may vary depending on income levels and business structure, the direction of travel is clear.
Making Tax Digital is changing how the self-employed and landlords interact with HMRC. Franchisees who fall under this change and already operate with clean, up-to-date accounts will find the transition smoother, but there will be changes for those who earn over £50,000.
Year-end is an opportunity to assess:
Strong compliance systems are not just about HMRC. They are the foundation for confident decision-making. You can read more about MTD for IT and whether it impacts you here.
If you operate more than one territory or are planning expansion, tax planning becomes more complex.
You may need to consider:
Expansion decisions should never be made in isolation from tax and cash flow planning.
This is where specialist business and franchise advice matters. For example: A generic accountant may not fully understand the interplay between royalties, franchise agreements and multi-site growth strategies.
Effective year-end planning is not about aggressive schemes or unnecessary risk.
It is about:
Franchisees operate within proven systems. But your financial strategy should be just as structured as any other business.
Franchise businesses are different.
Royalty models, marketing levies, territory rights and franchisor relationships all influence financial decisions. A strategy that works for an independent SME may not translate effectively in a franchise environment.
At the dt group, we work extensively within the franchise sector. We support franchisees and franchisors with:
Because we understand the commercial realities of franchising, our year-end reviews go beyond tax calculations. They focus on what your business needs next.
The difference between proactive planning and retrospective reporting is significant.
February and March are your opportunity to:
After year-end, options reduce. Before it, you have control.
If you are a franchisee and have not yet reviewed your position ahead of the 2025/26 year-end, now is the right time.
A structured year-end review could be one of the most valuable financial conversations you have all year.
Remember, we always recommend that you speak to your accountant for expert and up to date advice before making any decisions. Don’t have an accountant? Speak to us.