Most construction business owners wait until their accountant tells them how much tax they owe.
By then, it’s too late to do anything about it.
You’ve missed the chance to reduce your tax bill. You’ve missed the window to take any smart action. And worst of all? You’re left reacting, not planning. And that’s why most business owners keep getting stung.
That’s not how smart business owners do it.
If you want to run your company - not just work in it - you need to think ahead. That means reviewing your tax position before your year-end, not after.
And if you’re reading this with just a few months (or even weeks) to go before your business year closes… now’s the time to act.
Here are 5 key things every construction director should check before the books close.
1. Estimated Corporation Tax
You wouldn’t walk onto site without knowing what gear you need. So why finish a trading year without knowing what tax you owe?
A quick forecast of your year-to-date profits can give you a pretty accurate estimate of your upcoming corporation tax bill. And if it's higher than expected? You still have time to act.
A smart accountant will show you your current position, expected liabilities, and possible planning options - before the numbers are locked in.
Don’t wait for the tax bill to land. Forecast it. Plan for it. And adjust now if needed.
2. Director’s Pay Mix
Salary and dividends - it's a classic combo. But the mix needs to be right.
Pay too much salary and you overpay on tax and NI. Draw too much in dividends without reserves and you risk paying s455 tax charge at 33.75%.
There’s also the pension impact, student loan rules, and marginal tax rates to consider.
If you’re running a limited company, get your director’s remuneration strategy reviewed before 5th April (or your year-end, if earlier). Plan ahead and ensure you tweak your strategy before it’s too late.
3. Pension Contributions
Here’s one many construction directors overlook:
Pension contributions made by the company reduce your taxable profits.
That’s a straight cut to your corporation tax bill - plus you’re investing in your future.
It’s one of the few win-win tax moves left that HMRC is still happy with.
But timing is everything. Employer contributions must be made and cleared before the tax year ends to count. If you’re considering this, speak to both your accountant and IFA ASAP.
Even a modest contribution can make a dent in your tax bill and build a retirement plan that doesn’t rely on selling the business one day.
4. Unclaimed Business Expenses
You’d be amazed how many allowable costs go unclaimed every year - especially in construction firms where the director’s juggling a hundred things at once.
Some common misses:
Every legitimate expense you don’t claim means more profit on the books and more tax to pay.
Set aside an hour to review your bank accounts, receipts, and personal spending. Your accountant can help identify what qualifies.
It’s not glamorous. But it can save you thousands.
5. Timing of Invoicing or Purchases
This one’s tactical - but powerful.
If your year-end is looming and you’ve had a profitable year, delaying a new project onsite or accelerating a key purchase (like plant, tools, or software) can shift your taxable profit into a different period.
That can reduce this year’s tax bill - or help smooth income if next year will be slower.
But be careful. Don’t fiddle or fabricate. Just understand the timing levers available and use them responsibly.
It’s about playing within the rules - not avoiding them.
Actionable Tip
Book a pre-year-end review with your accountant this week.
Ask them to walk you through:
If they shrug it off or say “we’ll sort it later” - get a better accountant. One who understands construction and knows how to plan, not just process.
Final thoughts…
Of the five tax checks above - how many have you done this quarter?
If your answer is “none”… you’re leaving serious money on the table.
This stuff isn’t just tax talk. It’s business owner thinking.
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