January often feels like a natural time to “fix” things.

The year has just ended, tax bills are landing, and many business owners start questioning whether they’ve made the right decisions 🤔.

It’s very common to hear:

• “Should I change my business structure?”

• “Should I stop being a sole trader?”

• “Should I take more salary or dividends?”

• “Should I do something drastic to reduce tax?”

While these are sensible questions, January is usually the worst time to answer them.

In this blog, we explain why big tax decisions made in January are often rushed, reactive, and based on incomplete information — and why waiting usually leads to better outcomes.

January comes with a lot of pressure:

• Self Assessment deadlines

• Tax payments falling due

• Cashflow often at its weakest

• Christmas spending still fresh

That combination makes it easy to:

• Overreact to numbers

• Make decisions based on stress

• Focus on short-term pain rather than long-term planning 😬

Big tax decisions made under pressure rarely age well.

In January, most of the information in front of you relates to the year that has already ended.

That means:

• The tax bill can’t be changed

• Past profits are already fixed

• Decisions now won’t affect what’s already due

Making structural changes based purely on last year’s figures can lead to solutions that don’t suit your business going forward.

Good tax planning is forward-looking — January is mostly backward-looking 🔍.

We regularly see business owners in January wanting to:

• Change from sole trader to limited company

• Alter salary and dividend strategies

• Make major pension or investment decisions

• Restructure purely to reduce tax

These changes are sometimes right — but January is rarely the right moment to decide them.

Reactive decisions are often driven by:

• A single high tax bill

• One difficult cashflow month

• A comparison with someone else’s situation

Tax decisions should be strategic, not emotional.

January is not a “normal” month.

It’s affected by:

• Seasonal trading patterns

• Delayed customer payments

• Concentrated tax liabilities

Judging your business — or its structure — based on January alone can give a distorted picture.

A quieter or more expensive January doesn’t mean:

• Your business is failing

• Your tax position is wrong

• You need to overhaul everything

It usually just means… it’s January.

The best tax planning happens when:

• You have a clear view of the year ahead

• Cashflow has stabilised

• Decisions aren’t being rushed

• Options can be compared properly

That’s usually after January, once deadlines have passed and there’s time to think clearly 🧘.

This allows planning to focus on:

• Sustainability

• Profitability

• Cashflow

• Long-term efficiency

Not just reducing the next bill at any cost.

While January isn’t ideal for big decisions, it is useful for:

✔ Reviewing what happened last year
✔ Understanding where the pressure points are
✔ Identifying questions that need answering
✔ Flagging areas to plan properly later

Think of January as a diagnosis month, not a treatment month.

A more effective approach is to:
1️⃣ Get through January calmly
2️⃣ Understand the numbers without panic
3️⃣ Identify what you’d like to improve
4️⃣ Plan changes at the right time

That way, decisions are made deliberately — not defensively.

January can make even well-run businesses feel like something needs fixing.

In reality, most of the time it just needs context, clarity, and a bit of distance.

Big tax decisions are important — which is exactly why they shouldn’t be made in the most pressured month of the year.

At Llewellyns, we believe tax planning works best when it’s calm, considered, and aligned with where your business is heading — not just where it’s been.