At Burke Accountants we believe effective tax planning is about more than preparing for a tax deadline. For Irish SMEs, reviewing your position before the end of 2026 can help identify available reliefs, avoid unnecessary liabilities and ensure important financial decisions are made with a clear understanding of their tax implications. A proactive review can also highlight areas where records, payments or business structures need attention before year end.
1. Review Your Expected Tax Position
One of the most useful year-end exercises is to estimate your business’s likely taxable profit for 2026.
Waiting until accounts are finalised can make it harder to plan. By reviewing your management accounts, projected income and expenditure, you can get a clearer indication of your potential corporation tax or income tax position.
Look at:
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Expected turnover and profit for the year
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Significant changes in expenditure
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Capital purchases made during 2026
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Outstanding debts or bad debts
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Payments due before year end
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Changes in the business structure or ownership
The objective is not to reduce tax at any cost. A business should not spend money unnecessarily simply to create a deduction. Instead, understanding your expected tax liability allows you to make informed decisions about investment, expenditure and cash reserves.
A tax forecast can also help prevent an unpleasant surprise when the tax bill becomes payable.
2. Check Whether You Are Maximising Available Reliefs
Irish businesses may have access to a range of tax reliefs and allowances depending on their circumstances. These can include capital allowances on qualifying expenditure, certain employment-related incentives and other reliefs available to particular businesses.
If your business has invested in equipment, technology, vehicles or other qualifying assets during 2026, check that the relevant tax treatment has been considered.
This is particularly important where a business has experienced significant growth and has made larger investments than in previous years.
It is also worth reviewing whether planned expenditure before the end of the year has a genuine commercial purpose and whether its timing could affect your tax position.
Tax reliefs can have specific conditions and restrictions, so assumptions should be avoided. A review with your accountant before committing to significant expenditure can help clarify the position.
3. Review VAT and Revenue Compliance
Tax planning is not solely about reducing liabilities. Compliance should also form part of your year-end review.
Irish SMEs should consider whether VAT returns, payroll taxes and other Revenue obligations are fully up to date. Review your records for unusual transactions, corrections, outstanding balances and discrepancies between accounting records and returns already submitted.
VAT deserves particular attention where your business has experienced changes in turnover, pricing, suppliers or the type of goods and services being provided.
It is also sensible to review your bookkeeping processes. Missing invoices, incorrectly categorised transactions or incomplete documentation can create unnecessary work and may make it harder to support figures if Revenue raises questions.
Good records are therefore part of good tax planning. They provide the evidence needed to support the figures being reported.
4. Consider How You Will Extract or Reinvest Profits
If your business has generated a strong profit during 2026, consider what you intend to do with it.
There may be several options, including retaining funds within the business, investing in equipment or systems, making pension contributions where appropriate, paying remuneration or considering dividends where relevant.
The right approach will depend on the company’s financial position, the owner’s personal circumstances and the tax consequences of each option.
A common mistake is to make profit extraction decisions based solely on the immediate tax cost. The wider financial position should also be considered.
For example, taking too much money from a business can weaken working capital and leave the company with less capacity to deal with unexpected costs or fund future growth.
Before year end, review both your personal and business objectives. This can help ensure that tax planning supports the wider financial strategy rather than operating separately from it.
5. Plan for 2027 Before 2026 Ends
The final tax planning check should look beyond the current year.
Consider what is likely to change during 2027. Are you planning to hire employees? Purchase equipment? Expand premises? Increase borrowing? Enter a new market? Change your company structure? Sell part or all of the business?
The timing of major decisions can have tax and cash flow consequences.
For example, bringing forward or delaying an investment may affect when relief becomes available. Similarly, a planned change in ownership or business structure may require considerable preparation.
Planning ahead gives you more options. Leaving important decisions until after the year has ended can mean that opportunities have already passed.
Make Tax Planning Part of Your Annual Business Review
Tax planning should not be treated as a last-minute exercise carried out when accounts are being prepared. For an SME, it should form part of the wider financial management process.
A useful year-end review brings together your expected tax position, cash flow, investment plans, profit extraction strategy and plans for the year ahead.
For Irish business owners, 2026 is another reminder that financial decisions are interconnected. A decision that appears attractive from a tax perspective may have implications for cash flow, profitability or future investment.
The strongest approach is to look at the complete picture and make decisions based on the needs of the business rather than tax alone.
By completing these five checks before the end of 2026, SMEs can enter the new year with a clearer understanding of their obligations, opportunities and financial position.
If you would like to discuss your business, contact us by email liam@burke.ie or visit burke.ie.
Disclaimer
This article is based on publicly available information and is intended for general guidance only. While every effort has been made to ensure accuracy at the time of publication, details may change and errors may occur. This content does not constitute financial, legal or professional advice. Readers should seek appropriate professional guidance before making decisions. Neither the publisher nor the authors accept liability for any loss arising from reliance on this material.
