How will changes in UK tax administration affect year-end planning for 2024/25?

Why “tax administration” matters to year-end planning

When people talk about UK tax “changes”, they usually mean rates, thresholds, allowances, and reliefs. But for 2024/25, a lot of the practical pressure on year-end planning comes from something less headline-grabbing: changes in how tax is administered. By “tax administration” we mean the rules and processes that sit behind the numbers—how income is measured, how it is reported, what evidence you need to keep, the timing of submissions, the penalties for getting it wrong, and the way HMRC collects tax through digital systems.

Administration changes affect year-end planning in two big ways. First, they change what information you need and when you need it. Second, they can change the cost of being late, inconsistent, or disorganised—sometimes more than the cost of the tax itself if it leads to penalties, interest, or wasted professional time. The 2024/25 tax year is an especially important moment because it sits between major operational shifts: the move to tax-year-based profit allocation for many unincorporated businesses, and the continuing march toward more frequent digital reporting under Making Tax Digital for Income Tax (MTD for ITSA) from April 2026 for those above the qualifying income threshold.

This article focuses on what those administration changes mean for year-end planning for 2024/25, and how individuals, landlords, sole traders, and partnerships can avoid unpleasant surprises as the year closes.

Understanding the 2024/25 “year-end”: the dates that drive decisions

For most personal tax planning, “year-end” means the end of the UK tax year on 5 April 2025 (for 2024/25). Your planning window is therefore dominated by what you can do before that date—actions taken on or before 5 April 2025 often determine whether reliefs are available, whether income falls into one year or another, and whether you can use allowances efficiently.

Administration changes add a second set of dates that you need to manage alongside 5 April. These include: filing deadlines (for example, the 31 January deadline for online Self Assessment returns for 2024/25), payment deadlines (31 January 2026 for the balancing payment, plus payments on account if they apply), and in some cases the need to use provisional figures and then correct them later. The more HMRC pushes the system toward digital, near-real-time data, the more these dates matter because late corrections can trigger compliance questions, penalty points, or cashflow surprises.

Basis period reform: why 2024/25 is a turning point for many self-employed people and partners

One of the most important administrative changes affecting 2024/25 is basis period reform for unincorporated businesses (sole traders and partnerships taxed on income tax). Historically, many businesses were taxed on a “current year basis” linked to their accounting year end (for example, a 30 September year end). That meant your tax return could include profits for an accounting period ending in the tax year, rather than profits actually arising between 6 April and 5 April.

From 2024/25, for affected businesses, the move to a “tax year basis” means that taxable trading profits are aligned with the tax year itself—profits arising between 6 April and 5 April become the taxable amount, regardless of your accounting date. This is an administrative change rather than a change in rates, but it can have a very real financial impact because it changes how much profit is pulled into a given tax year and how much estimating is required.

For year-end planning, the key implication is that the tax return process may require apportionment and, in many cases, the use of provisional figures. If your accounts do not end on 31 March, 5 April, or very close to those dates, you may need to combine parts of two sets of accounts to arrive at the tax-year profit figure. For example, if your year end is 30 June, your 2024/25 taxable profits may include nine months from the year ended 30 June 2024 plus three months from the year ending 30 June 2025. If the later accounts are not finalised by the time you file, you may need to submit using provisional numbers and then amend later when the final accounts are ready.

That shift changes what “good year-end planning” looks like. In the past, a business might focus on managing profits within the accounting year (for example, timing invoices or expenses around 30 June). Now, the tax-year boundary (5 April) becomes the more relevant planning cut-off for many decisions, even if your statutory accounts still run to a different date.

Practical year-end actions under basis period reform

If you are within Self Assessment and you run a trade as a sole trader or partnership member, year-end planning for 2024/25 should include a deliberate “data readiness” check, not just a tax minimisation checklist. Consider the following practical actions before 5 April 2025 and shortly after:

1) Identify whether you will need apportionment. If your accounting year end is not aligned with the tax year, assume you will need to split and combine periods. That affects record-keeping, bookkeeping cut-off accuracy, and how quickly you need management information after year-end.

2) Decide how you will handle provisional figures. If your accountant typically finalises accounts later in the year, discuss whether you will file with estimates and amend later. The administrative cost of amendments can be significant, and repeated amendments can increase the risk of HMRC queries.

3) Locate and quantify overlap relief records. Basis period reform is designed to eliminate some old complexities, but overlap profits and overlap relief still matter in the transition narrative for many businesses. Even in 2024/25, you may need good historic information to ensure reliefs are not missed. If your records are incomplete, year-end is the time to reconstruct them while evidence is still accessible.

4) Consider whether changing your accounting date is sensible. Some businesses may eventually prefer to align accounts to 31 March or 5 April to reduce apportionment and the need for estimates. Changing an accounting date can have wider implications (commercial, banking, reporting, partner expectations), but it is now a core administrative planning question, not an afterthought.

5) Tighten your bookkeeping cadence. If your bookkeeping is quarterly or ad hoc, tax-year basis effectively punishes that habit because you will need clearer in-year data to avoid large estimates. A monthly close process, even a lightweight one, can dramatically reduce year-end stress.

Making Tax Digital for Income Tax: not “live” in 2024/25, but already shaping planning

MTD for Income Tax does not generally require mandated quarterly reporting during 2024/25 for most taxpayers, but it still affects year-end planning because 2024/25 is one of the tax years used to determine who must join when the regime becomes mandatory. In broad terms, if your qualifying income is over the relevant threshold in 2024/25, you may be brought into MTD for Income Tax from April 2026.

This creates a new year-end planning question that did not exist in the same way a few years ago: “Will my 2024/25 income level trigger a change in my reporting obligations in a future year?” That is not a tax rate question; it is an administration question. But it can influence decisions such as whether to accelerate or defer certain receipts, whether to restructure (for example, incorporating), or whether to separate property and trade activities where that is commercially and legally appropriate.

It is important to be careful here. Planning purely to avoid an administrative regime can be short-sighted if it creates higher long-term tax or commercial risk. However, understanding where you land relative to the threshold can help you prepare properly, budget for software, and redesign processes before you are forced to do so under time pressure.

Year-end preparation for digital reporting: what to do in 2024/25 even before it’s mandatory

If you are likely to be within scope of MTD for Income Tax in 2026, 2024/25 is a sensible year to treat as a “dry run” year. Not because you must file quarterly updates, but because the effort is mostly in changing habits and systems, not in pressing the submit button.

Choose a record-keeping approach that can scale. If you are currently using spreadsheets, you may be able to continue with a spreadsheet-based workflow if it is supported by bridging solutions, but you should not assume your current setup will remain painless. Year-end planning should include deciding what your “system” will be: bookkeeping software, a bank-feed tool, or a structured spreadsheet process with clear controls and documentation.

Improve the quality of source evidence. Digital reporting increases the value of clean, consistent transaction narratives and properly stored receipts. In 2024/25, focus on capturing receipts as you go (for example, using a phone app or a consistent email-to-folder routine) and ensuring that your business and personal spending are cleanly separated.

Standardise categories early. A common pain point under more frequent reporting is constantly reclassifying transactions at year-end. If you choose categories that mirror how you want to understand your business (and how your accountant will use them), you reduce rework and also produce better management information.

Reconcile more often than you think you need. Monthly bank reconciliations are a strong discipline because they flush out missing invoices, duplicated expenses, and misposted items. Year-end planning is not just about 5 April; it is about entering the new year with clean ledgers that do not require heroic clean-up.

Penalty and compliance trends: why administration changes make “lateness” more expensive

Another administrative shift that affects year-end planning is the evolving penalty framework and HMRC’s increasingly data-driven compliance approach. HMRC has been moving toward penalty models that differentiate between occasional mistakes and persistent non-compliance, including points-based systems in some areas. Separately, late payment penalties and interest can mount quickly when cashflow planning is weak.

For year-end planning, the takeaway is that timeliness and predictability matter more. It is no longer enough to aim to “get the return done sometime before the deadline.” Under a more digital, data-matched system, repeated late submissions, frequent amendments, or inconsistent numbers can increase the risk of follow-up—even if the tax ultimately paid is correct.

That changes the role of year-end planning. You are planning not only to optimise tax liabilities but also to reduce administrative friction: fewer surprises, fewer last-minute scrambles, fewer corrections, and fewer triggers for HMRC attention.

Self Assessment administration: designing your year-end plan around the 31 January cycle

Many taxpayers treat 31 January as a single annual event: file the return, pay the balance, move on. For 2024/25 planning, it is more effective to treat the cycle as a series of milestones that begin before 5 April and continue through the following January.

Milestone 1: Pre-5 April decisions. This is where classic planning lives: pension contributions, ISA subscriptions, charitable giving, capital gains management, and timing of income and deductible expenses where appropriate.

Milestone 2: Early post-year-end tidy-up (April to June). This is where administration starts to dominate. Gather your P60/P11D information (where relevant), confirm dividend vouchers, reconcile bank and investment statements, and ensure you have documentation for reliefs. Doing this early reduces the risk of missing items and makes your tax estimate more accurate.

Milestone 3: First tax estimate and cashflow plan (summer). A mid-year estimate gives you time to save for the January payment and any payments on account. It also gives you time to adjust if your estimate looks unexpectedly high.

Milestone 4: Pre-filing quality control (autumn). This is where you review the “shape” of the return: are there anomalies, spikes in income, or unusually high expenses that need explanation or better documentation?

Milestone 5: Filing and payment (by 31 January). Filing early can be a strategic year-end decision in itself because it locks in certainty and reduces stress. It can also accelerate refunds where relevant and can allow you to address any queries with more time in hand.

Payments on account: an administrative feature that shapes year-end decisions

Payments on account are not a tax increase; they are a collection mechanism. But they can feel like a shock because they bring forward cash payments into January and July based on the previous year’s liability. For year-end planning for 2024/25, the key is to treat payments on account as part of the overall cashflow model, not as an unpleasant surprise to “deal with later.”

Administration changes toward more frequent reporting are partly motivated by helping taxpayers predict liabilities earlier. Whether or not that promise is fulfilled in practice, your own process can deliver the same benefit: accurate in-year bookkeeping and timely estimates. If you expect your 2024/25 liability to be lower than 2023/24 (for example, because income has dropped), there may be scope to reduce payments on account. But that is a decision that should be made carefully, because reducing too far can lead to interest if the final bill is higher than expected.

Good year-end planning therefore includes: (1) estimating your 2024/25 liability as early as you reasonably can; (2) modelling the impact on both January and July payments; and (3) setting aside funds routinely rather than relying on a last-minute scramble.

Employer reporting and benefits: preparing for more “real-time” tax collection

For employees and employers, one of the notable administrative directions of travel is toward real-time reporting and taxation of benefits in kind through payroll systems, reducing reliance on end-of-year forms. While the timing and scope of these changes can evolve, the practical implication for 2024/25 year-end planning is that payroll and HR processes should be viewed as part of the tax function, not separate from it.

If you are an employer, year-end planning for 2024/25 should include an audit of what benefits and expenses you provide, how they are captured, and whether the data you hold is good enough to support more automated reporting in the future. Even before any mandated shift, employers often lose time at year-end chasing information: mileage logs, private medical insurance details, company car data, and ad hoc expenses. As HMRC pushes the system toward more real-time tax collection, the cost of disorganised benefit data is likely to increase.

If you are an employee, this trend matters because your tax code and your in-year deductions can change more quickly based on reported benefits. That can make year-end surprises smaller, but it can also make payslip deductions feel more volatile if information is corrected mid-year. A practical year-end habit is to review your tax code notices and compare them to your actual benefits, flagging discrepancies early rather than waiting for the annual reconciliation.

Data matching, “nudges”, and why documentation is now part of planning

HMRC’s compliance approach has become more data-driven. In practice, that means HMRC can compare what you report with what third parties report: employers, pension providers, banks, investment platforms, and others. The result is an increased use of “nudge” communications—letters or prompts that encourage taxpayers to check their returns or disclose missing income.

You do not need to be doing anything wrong to receive a query, but you do need to be able to respond efficiently. That is why documentation is now part of year-end planning. A well-planned year-end file might include: dividend vouchers and dates, interest statements, pension contribution confirmations, details of large or unusual expense claims, and clear support for any reliefs claimed. The aim is not to build a fortress of paper; it is to be able to answer “why does this number look like this?” without panic and without an expensive research exercise months later.

Landlords and property income: administration is pushing you toward better records

Property income is often treated casually, especially by accidental landlords or people with one additional property. But administration changes, particularly the direction of MTD for Income Tax, are pushing landlords toward more disciplined record-keeping and more regular review of income and costs.

For 2024/25 year-end planning, landlords should focus on three administrative fundamentals:

1) Clean separation of property and personal transactions. A dedicated bank account for rental activity is not legally required, but it makes compliance dramatically easier and reduces the risk of missed items.

2) Evidence for allowable expenses. Repairs vs improvements, replacement of domestic items, agent fees, safety certificates, insurance, and finance costs all have different treatments and documentation needs. The administrative burden increases when receipts are missing or when work done is not clearly described.

3) Timing and cut-off discipline. If your agent’s statement runs monthly, reconcile it to your bank and ensure you understand what period the income relates to. Year-end planning should include making sure you have the right rental statements up to 5 April and that you understand any arrears, deposits, or prepayments.

Even if MTD is not yet mandatory for you, adopting these habits in 2024/25 will reduce costs later and will make it easier to assess where you sit relative to future reporting requirements.

Partnerships: aligning partner tax planning with partnership administration

Partnerships have always required coordination because the partnership’s reporting timetable influences each partner’s Self Assessment position. Basis period reform and the broader push toward digital reporting increase the value of that coordination.

For 2024/25 year-end planning, partners should ensure that they receive timely and clear profit allocation information, and that the partnership’s accounting process can support any apportionment required to produce tax-year figures. Where provisional numbers are used, there should be an agreed process for communicating revisions so that partners can amend returns efficiently and consistently. The administrative risk in partnerships is that different partners may file based on different versions of the numbers, creating inconsistency that attracts questions.

Partnerships should also review whether their internal systems (bookkeeping cadence, partner drawings tracking, capital accounts, expense policies) are robust enough for a future in which more frequent reporting and tighter deadlines are normal. A partnership that improves its internal discipline in 2024/25 can significantly reduce the cost of change later.

What “good” year-end planning looks like in an administration-heavy environment

In a world where administration is changing as fast as policy, “good year-end planning” has a broader definition. It still includes classic tax moves, but it places equal weight on process.

Good year-end planning for 2024/25 typically includes:

Tax position clarity: a realistic estimate of taxable income and gains before filing season, so there are no cash shocks in January.

Record readiness: transactions reconciled, receipts captured, and a clear audit trail for anything unusual.

System readiness: a bookkeeping approach that can support future digital reporting without a total rebuild.

Timetable discipline: internal deadlines that are earlier than statutory deadlines, leaving time for review and correction.

Communication: early engagement with accountants, payroll providers, or software providers so that changes are planned rather than reactive.

A practical 2024/25 year-end checklist focused on administration changes

Below is a practical checklist you can use as 5 April 2025 approaches. It is written with administration changes in mind, not just tax savings.

For everyone in Self Assessment:

• Create a “2024/25 tax folder” (digital or physical) and store key documents as they arrive rather than hunting later.

• Review your HMRC online account information and any tax code notices for consistency with your circumstances.

• Build an early tax estimate and a savings plan for the January payment date.

For sole traders and partners:

• Confirm your accounting date and whether you will need apportionment for tax-year basis.

• Tighten bookkeeping to at least monthly reconciliation.

• Identify any areas where you may need provisional numbers and plan how amendments will be handled.

• Locate overlap relief information and discuss any gaps with your adviser early.

For landlords:

• Reconcile rental income and agent statements up to 5 April.

• Organise expense evidence and note the purpose of larger works clearly (repair vs improvement questions are easier to answer when notes are made at the time).

• Consider whether your 2024/25 income level suggests you will be within future digital reporting thresholds and plan system changes accordingly.

For employers:

• Review benefits and expenses processes: what is provided, how it is recorded, and whether data is complete.