An owner-director of an established public relations company needed up-to-date accounts urgently. After leaving employment to build the company, demonstrating sufficient income for a competitive mortgage rate had been difficult. With the existing mortgage rate due to increase, the lender required two years of company accounts.
The challenge
The latest company year had only just ended, but the director could not afford to wait months for the accounts. Completing them quickly would provide the second year of financial evidence needed for the mortgage application.
The company was also generating sizeable profits. That created a separate planning question: how much income should be extracted, when should it be taken and how could sufficient personal funds be made available for upcoming tax payments without creating unnecessary tax exposure?
What Digivolve did
Digivolve completed the latest company accounts within five days of the year-end, giving the director two completed years of accounts for the mortgage process.
While preparing the accounts, we reviewed the company’s profits and the director’s planned income. We recommended an additional dividend of £38,000, which was formally voted before 5 April 2026. This brought total income to approximately £100,000 for 2025/26 rather than allowing the same extraction to fall into 2026/27 and potentially increase the following year’s income to approximately £138,000.
The tax-planning result
The timing mattered because the higher dividend tax rate increased from 33.75% in 2025/26 to 35.75% in 2026/27. Personal Allowance is also reduced by £1 for every £2 of adjusted net income above £100,000 and can be completely lost. Income above £125,140 falls within the additional-rate band.
Based on a £12,570 salary, the balance as dividends, no other income and the rates applying in each year, taking the £38,000 dividend in 2025/26 produced an estimated personal tax saving of approximately £6,879 compared with taking it in 2026/27 on top of £100,000 of income.
Of the additional funds, approximately £30,000 was available to extract from the company to cover the director’s personal tax payment for 2025/26 and first payment on account for 2026/27, while £8,000 was available for personal use.
The official dividend rates and Personal Allowance rules used in the comparison are available in the GOV.UK Income Tax rates and allowances.
Planning beyond the immediate deadline
We also recommended reviewing an increase in employer pension contributions from £18,000 to £60,000 for the upcoming year. If profits remain strong, the possible use of unused annual allowance from earlier years may also be considered, subject to eligibility, available allowances, company circumstances and advice at the time. This pension planning has been recommended but has not yet been implemented, so no pension-related tax saving is claimed.
The client was pleased with our advice and appreciated the prompt turnaround.
— Owner-director of a public relations company
What this case demonstrates
Fast accounts can solve an immediate practical problem, but the figures can also reveal planning opportunities that may otherwise be missed. In this case, completing the accounts promptly supported the mortgage evidence requirement, enabled a time-sensitive dividend decision and created a clearer plan for tax payments and future pension contributions.
Digivolve helps owner-managed companies with annual accounts, director remuneration and forward-looking tax planning. If you need your accounts completed promptly or want to review how and when you extract profits, speak to our accountants in Haywards Heath.
This anonymous case study describes one client’s circumstances. The comparison is based on the assumptions stated above. Tax and pension treatment depends on individual circumstances and rules can change.
Explore your own figures with our salary and dividend tax calculator, including the effect of extra dividends on your Personal Allowance.