If you’re a business owner looking to keep your financial house in order, one of the smartest things you can do is make use of tax-efficient investments.

The UK offers a few tidy little wrappers that not only make your money work harder but also keep HMRC’s fingers out of your biscuit tin for a bit longer.

Let’s take a tour through your tax-year toolkit – ISAs, EIS, and VCTs.

Individual Savings Accounts (ISAs): The tidy drawer everyone should have

Think of ISAs as the sock drawer of investing. They’re not flashy, but they’re essential. Every adult in the UK gets an ISA allowance (£20,000 for the 2025/26 tax year), and anything you put inside it can grow free of Income Tax and Capital Gains Tax.

There are four types of ISA:

• Cash ISAs
• Stocks & Shares ISAs
• Lifetime ISAs
• Innovative Finance ISAs

For most business owners looking to build long-term wealth, Stocks & Shares ISAs are normally the go-to as they offer the best returns but come with a higher degree of risk.

They let you invest in shares, funds, and bonds while keeping tax at bay.

If you are looking to save for your future retirement or a house purchase, then a Lifetime ISA (or LISA) could also be a useful route.

A Lifetime ISA offers a 25 per cent Government bonus on contributions to help buy a first home or save for retirement.

Available to those aged 18 to 39, you can contribute up to £4,000 per tax year up to the age of 50 and receive up to £1,000 in bonuses.

Funds can be withdrawn tax-free to buy a home worth up to £450,000 or for any purpose from age 60.

Enterprise Investment Scheme (EIS): For the adventurous declutterer

EIS is like turning your loft into a startup incubator. You invest in early-stage businesses, and, in return, the Government gives you some rather generous perks:

• 30 per cent Income Tax relief on investments up to £1 million per tax year (or £2 million if investing in knowledge-intensive companies)
• Capital Gains Tax deferral on gains reinvested into EIS
• No CGT on gains from the EIS shares after three years
• Loss relief if things go south—because sometimes the loft collapses

It’s higher risk, sure, but potentially high reward—and incredibly efficient for trimming down your tax bill.

Top tip: Make EIS investments early in the tax year to maximise the holding period benefits (and reduce your last-minute stress in April).

Venture Capital Trusts (VCTs): The stylish storage boxes

If EIS is like storing things in the loft, VCTs are more like popping them in stylish under-bed storage—accessible, but still out of the way. With VCTs, you invest in a trust that spreads your money across several early-stage businesses, so the risk is shared.

Here’s the good stuff:

• 30 per cent Income Tax relief on investments up to £200,000 per tax year
• Tax-free dividends
• No CGT on any gains from selling your VCT shares

It’s a little more hands-off than EIS but still brings strong tax advantages.

Top tip: Reinvest VCT dividends to benefit from compounding, especially if you’re not drawing income yet.

Stay on top of your finances

Making the most of these tax wrappers isn’t about throwing money at them last-minute. It’s about routine maintenance.

Like hoovering behind the sofa or organising the shed, financial housekeeping is best done little and often.

Here’s your annual checklist:

• Maximise your ISA allowance early in the year to give investments more time to grow
• Review your appetite for risk: EIS and VCTs can be brilliant, but they’re not for everyone
• Speak to a financial adviser before investing, some structures can be complex, and timing is everything
• Keep good records (especially with EIS/VCT forms), as you’ll need these to claim reliefs

Good financial housekeeping doesn’t just make your life neater. It helps protect your wealth, reduce tax, and set your business and personal finances on a stronger footing.

Many of our clients will need advice on financial housekeeping and we can recommend you to a firm of Independent Financial Advisers to help you maximise tax efficiencies.

We have developed a close relationship with Finli so that you can draw on their experience and expertise to work together to understand and meet your financial goals.

Please contact Jeremy – jeremy@cogentaccountants.co.uk – for further details.

Your capital is at risk. The value of investments can go down as well as up in value and you may get back less than you invested.

Financial advice given by Finli is regulated and authorised by the Financial Conduct Authority.