This page has been written and funded by Wesleyan Financial Services.
Smart actions you can take now to optimise your tax position.
As a doctor, you’re no stranger to long hours and high standards of care. However, according to Jonathan Halberda, Specialist Financial Adviser at Wesleyan Financial Services, there’s a critical area of your finances that also requires attention: Time-limited and tax-efficient saving opportunities.
With the tax year end on the horizon, now is the perfect time to tick things off your financial checklist. By maximising your allowances and exploring your tax options, you can make your money go further.
Have you maximised your pension contributions up to the annual allowance?
Putting savings toward your pension is incredibly tax efficient, which is why it can be good to make use of your full allowance if you can. You can also carry forward any unused allowance from the three previous tax years, meaning you could add more to your pension pots if necessary.
Defined contribution schemes like personal pensions are pretty straightforward to manage. It’s the defined benefit schemes, like the NHS Pension Scheme, that are more complex.
Unlike a personal pension, how much you make or contribute to the scheme isn’t the figure you would set against your annual allowance. It’s far more complicated than that and uses a calculation that determines how much growth has taken place within your pension.
This is where you could benefit from meeting with a medical Specialist Financial Adviser. They can guide you through your pension contribution strategy and maximising your allowance.
Used your annual ISA allowance?
In contrast to the pension allowance, you can’t carry over any unused ISA allowance to the following year. So, it’s a case of use it or lose it. You get a tax-free ISA allowance of £20,000 each year to use across cash ISAs, stocks and shares ISAs and innovative finance ISAs.
From April 2027, anyone under the age of 65 will have a capped allowance of £12,000 for cash ISAs. The remaining £8,000 can be used for investment through stocks and shares ISAs.
Planning alongside a partner means a potential tax-efficient investment of £40,000. If you have children or grandchildren, you can also give them a head start on their savings by utilising the £9,000 allowance on their junior ISA.
The value of investments can go down as well as up and you may get back less than you invest.
Considered or declared any gift-giving?
Making use of your £3,000 annual gifting allowance (and any carry over from the previous year) can be an effective way to reduce your estate’s inheritance tax liability.
If you’re a higher earner, making charitable donations can help decrease your taxable income below the additional rate tax band, which sits at £125,140 for 2025/26. This may help you hold onto your Personal Allowance (gradually withdrawn once you earn over £100,000). Making additional pension contributions also has the same effect.
It’s worth noting that if your adjusted net income is between £100,000 and £125,140, you could end up paying an effective 60% tax rate on any earnings within this bracket. That’s in addition to the loss of tax-free childcare and a reduction in funded hours for under 5s.
If you fall within this bracket, a Specialist Financial Adviser can help you navigate these complex matters.
Explored your dividends options?
If your practice is set up as a limited company, you could draw income as a business director through dividends, rather than a salary – the first £500 of which is tax-free. Dividend allowances reduce the amount of tax and National Insurance Contributions (NICs) required.
Dividend rates (ordinary and upper rates only) are set to rise by 2% from April 2026. You could potentially reduce your Corporation Tax, Income Tax (including dividends), and NICs by diverting your company’s pre-tax profits into a personal pension.
You can also potentially pass these profits on to your spouse or adult children if they’re genuine shareholders.
Maximised your Capital Gains Tax allowance?
If you’re looking to sell any assets, such as your medical business, you can make use of your £3,000 Capital Gains Tax (CGT) allowance. Like the ISA allowance, CGT only runs from tax year to tax year.
Tax treatment depends on individual circumstances and is subject to change in the future.
The benefits of staying one step ahead
As we’ve mentioned in this article, there are some changes to allowances on the horizon. These include an increase in dividend tax from 2026, changes to ISA allowances from 2027 and the introduction of the ‘mansion tax’ on properties worth more than £2 million from 2028.
With this in mind, you may want to make the most of the available allowances before changes are introduced.
If you’d like to find out more about effective financial planning tailored to your circumstances, speak to a medical Specialist Financial Adviser from Wesleyan Financial Services today. Charges may apply.
This page has been written and funded by Wesleyan Financial Services.
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Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority. Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.
