Smart Year-End Planning for Irish SMEs

As the year draws to a close, many business owners are focused on wrapping up projects, managing stock, or planning for the holidays. But before you power down for the festive season, it’s worth taking a little time to look at your finances, not just your books, but how well you’ve made use of your tax allowances, credits, and reliefs this year.

A bit of thoughtful year-end planning can make a real difference to your bottom line. It can help reduce your tax bill, improve cash flow, and set you up for a smoother start to the new year.

At Kinore, we’ve helped hundreds of Irish SMEs find savings and opportunities through proactive financial planning. Here are some key areas to review before 31 December to make sure you’re getting the most from what’s available to you.

1. Review Your Personal Tax Credits and SRCOP

Every employee and company director in Ireland has access to personal tax credits and a Standard Rate Cut-Off Point (SRCOP), i.e. the threshold at which you move from paying 20% income tax to 40%.

If your pay structure or credits aren’t set up efficiently, you could end up overpaying tax without realising it.

Take some time to check that:

1. Your tax credits (such as the personal tax credit, PAYE credit, or home carer credit) are correctly applied.
2. Your SRCOP accurately reflects your income and any other earnings (e.g., from a spouse, a secondary job, or dividends).
3. You’ve adjusted for any changes in circumstances, such as marriage, becoming a parent, or a change in employment, that could affect your entitlements.

For directors, it’s worth ensuring that your salary structure aligns with your tax-efficiency goals. A slight adjustment before 31 December can make a significant impact on your final take-home pay.

If you’re unsure whether your business setup is optimal, your accountant can review your situation and identify any potential improvements before it’s too late to make changes for this tax year.

2. Balance Directors’ Salaries and Dividends

If you’re a company director, one of the most powerful year-end planning tools available to you is deciding how to pay yourself from your company: through salary, dividends, or a combination of both.

Each approach carries different tax implications:

• Salary counts as a business expense, reducing your company’s taxable profits. However, it attracts PAYE, PRSI, and USC.
• Dividends don’t reduce your company’s taxable profits but can be more tax-efficient at the personal level in some instances.

The right balance depends on your company’s profitability, cash position, and your personal circumstances. Reviewing this before year-end gives you the chance to:

1. Optimise the overall tax efficiency between company and personal income.
2. Make any necessary dividend declarations in time to be recorded within the current financial year.
3. Ensure your director’s loan account is in good standing and doesn’t trigger unintended tax liabilities.

This is one area where having expert advice can pay off. A short review with your accountant can help you decide the most tax-efficient approach for your specific situation.

3. Claim All Available Expenses and Reliefs

You’d be surprised how many businesses leave money on the table by failing to claim all allowable expenses and reliefs.

As the year wraps up, go through your records to ensure you’ve captured everything you’re entitled to, including:

1. Business expenses such as mileage, office supplies, professional fees, and software subscriptions.
2. Capital allowances on equipment or vehicles purchased during the year.
3. Small Benefit Exemption, which allows employers to give up to two small non-cash benefits (such as gift cards or vouchers) to employees each year, up to a combined value of €1,500 tax-free.

Even seemingly minor claims can add up, and failing to include them means you’re effectively overpaying tax.

If your bookkeeping is up to date, this review should be straightforward. But if you’ve been busy running the business and receipts have piled up, now’s the perfect time to catch up before the year-end deadlines.

4. Check Your Pension Contributions

Pension contributions remain one of the most effective ways to reduce your tax bill while investing in your future.

By making an employer pension contribution before 31 December, your company can claim a tax deduction in the current financial year. This can also reduce your corporation tax liability.

If you contribute personally, you can claim income tax relief on your contributions, depending on your age and income level.

Here are a few things to consider before year-end:

• Are you maximising your annual contribution limits?
• Have you reviewed whether your pension scheme is performing effectively?
• Would an additional contribution before year’s end improve both your personal and company tax positions?

Discussing your pension strategy with your accountant or financial adviser before 31 December ensures you don’t miss out on this valuable tax planning opportunity.

5. Review Your Business Structure and Profit Extraction Strategy

For many SMEs, year-end is also a good time to step back and look at the bigger picture. Is your business structure still the best fit for your growth plans? Are you taking profits most efficiently?

For example:

• If your company has grown significantly, it may be time to revisit your director remuneration or explore group structures for better tax management.
• If you’ve been operating as a Sole Trader, switching to a Limited Company before the new year might offer long-term tax and liability advantages.
• Conversely, if your company structure has become too complex, simplifying it could reduce compliance costs and admin burden.

Making structural changes should never be rushed, but year-end is a natural checkpoint to start the conversation.

At Kinore, we often work with clients at this stage to model different scenarios, helping them understand the impact of changes on tax, cash flow, and future planning.

6. Plan for 2026: Forecasting and Cash Flow

Good year-end planning isn’t just about saving tax; it’s also about setting yourself up for a stronger new year.

Once your 2025 numbers are finalised, take the opportunity to:

1. Review your cash flow and identify any upcoming pinch points.
2. Set realistic financial goals for 2026 based on your performance this year.
3. Consider budgeting for investment, whether that’s hiring, upgrading systems, or expanding your market reach.
4. Build in a plan for tax payments (such as preliminary corporation tax or income tax) to avoid surprises.

This proactive approach can give you a more precise financial roadmap, reduce stress as deadlines approach, and, with accurate cash flow forecasting, better position you to make confident business decisions in the new year.

7. Schedule a Quick Year-End Review with Your Accountant

The most effective way to ensure you’re fully optimised for year-end is to have a short, focused review with your accountant.

A good accountant won’t just crunch the numbers – they’ll help you spot opportunities, avoid pitfalls, and plan.

At Kinore, our in-house team works closely with business owners to identify:

• Missed reliefs or allowances that could reduce tax bills.
• Ways to more efficiently balance salaries, dividends, and pension contributions.
• Steps to improve cash flow and profitability in the year ahead.

Even a 30-minute call can help you confirm that you’re making the most of what’s available before 31 December and start the new year on a firmer financial footing.

Ready to Get Started?

If you’re unsure whether you’ve used all your credits, allowances, and reliefs, or if you’d just like a professional second opinion, we’re here to help.

Book a Discovery Call with our Client Services Team at Kinore today, and let’s make sure you’re finishing the year in the best possible position and setting yourself up for success in 2026.