19 Mar Lights, Camera, Action: Why Media Freelancers Need to Review Their Profit Extraction Before April 6th
Are you making the most of your hard-earned production fees before the tax landscape shifts next month?
If you work in the TV and film industry, you’re used to the "wrap." The end of a project is a time to tidy up the loose ends, hand back the kit, and wait for the next big gig. But as we approach April 6th, 2026, there is a much bigger "wrap" coming: the end of the 2025/26 tax year.
For the media freelancers we look after here at Harrison’s Accountancy, this isn't just another date in the diary. With significant changes coming to dividend tax rates and Capital Gains Tax (CGT), specifically regarding Business Asset Disposal Relief (BADR), the way you take money out of your company right now could save you thousands of pounds.
In the world of creative freelancers, cash flow is often "feast or famine." If you’ve had a successful year working on major productions or long-running series, you likely have a healthy balance sitting in your business bank account. The question is: should you take it out now, or wait until after the clocks strike midnight on April 5th?
The 2% Sting: Understanding the Dividend Tax Hike
Why is everyone talking about April 6th? Because taking a dividend is about to get more expensive.
For most media professionals operating through a Limited Company, the most tax-efficient way to pay yourself has traditionally been a combination of a low salary and higher dividends. It’s a classic strategy that has served the industry well for decades. However, the Chancellor has signaled a shift.
Starting April 6th, 2026, dividend tax rates are set to increase by a flat 2% across all bands. While 2% might sound like a small "production fee," when applied to your annual income, the numbers start to look a lot more significant.
- Basic Rate: Increasing from 8.75% to 10.75%
- Higher Rate: Increasing from 33.75% to 35.75%
- Additional Rate: Increasing from 39.35% to 41.35%
If you are a higher-rate taxpayer and you were planning to take a £40,000 dividend in May to fund a summer break between shoots, doing it in March instead could save you £800 in tax. That’s a significant amount of kit, or a very nice weekend away, left on the table simply because of timing.
"Crystallising" Your Profits: The Strategy of the Proactive Freelancer
What does it actually mean to "crystallise" a dividend, and why should you do it now?
In accounting terms, "crystallising" means taking an action now to lock in a specific tax treatment. If you have retained profits in your company (money left over after all your expenses and Corporation Tax have been accounted for), you have a choice. You can leave that money in the company "pot," or you can distribute it to yourself as a shareholder.
Because we know the rates are going up, "crystallising" your dividends before April 6th means you are intentionally paying the tax at the 2025/26 rates rather than the 2026/27 rates.
At Harrison’s Accountancy, we are currently working with our Media and Entertainment clients to look at their balance sheets. We’re asking: "Does the company have the cash? Do you have the ‘distributable reserves’? And where do you sit in your personal tax bands for this year?"
If you haven’t fully utilized your basic rate tax band for the 2025/26 year, failing to take a dividend before April 6th is effectively throwing money away. You are trading a lower tax rate today for a guaranteed higher one tomorrow.
Capital Gains Tax and the BADR Shift
Are you thinking of closing your company or moving back to PAYE? The rules for "getting out" are changing.
Many freelancers in the TV and film sector operate through a company for a few years then move into a "Deemed Employee" role or a staff position for a specific long-term project. When you decide to close your Limited Company, you often use something called Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs' Relief.
BADR allows you to pay a reduced rate of Capital Gains Tax (10%) on the profits you take out when closing the business, provided certain conditions are met. However, as part of the wider tax shifts in 2026, we are seeing a tightening of these reliefs and a potential upward creep in CGT rates.
If you have been considering a "Members' Voluntary Liquidation" (MVL) to extract a large sum of money (usually over £25,000) at that 10% rate, the window of opportunity to do so under the current favorable conditions is narrowing. Waiting until the new tax year could mean your "final wrap" costs you a lot more in capital taxes than you anticipated.
Why This Hits Media Freelancers Differently
The irregular nature of film and TV work makes "one-size-fits-all" tax advice dangerous.
In most industries, income is predictable. In media, you might earn 80% of your annual income in a frantic four-month stint on location in Bedfordshire or at a London studio, followed by three months of "development" (or looking for the next gig).
This volatility is why profit extraction is so sensitive. If you have a bumper year, you might be tempted to leave the cash in the company to "smooth out" your income over the next year. While that is often a smart move for managing your tax bands, the 2% dividend hike changes the math.
You need to balance the benefit of "smoothing" your income against the cost of the tax increase. This is where we come in. As proactive accountants in Biggleswade, we don't just look at the numbers after the year has ended; we help you forecast. We use tools like Xero to see exactly where your profit stands today, so we can make an informed decision before the April 6th deadline.
The "Siren Call" of the Director’s Loan
Be careful about taking money out without declaring it properly: HMRC is watching.
Sometimes, when a freelancer needs cash for a mortgage deposit or a big purchase, they might take a "Director's Loan" from the company. If you have an outstanding loan from your company, April 6th is a vital deadline for you too.
If you don't repay that loan or "dividend it out" within nine months of your company's year-end, you could face Section 455 tax. With dividend rates rising, the cost of clearing those loans via a dividend is also going up. If you have a balance on your Director’s Loan account, clearing it before April 6th could be a very savvy move to avoid that extra 2% hit on the "repayment" dividend.
Your 3-Week Action Plan
Time is running out. Here is what you need to do before the Easter eggs arrive.
We are now officially in the countdown. To ensure you aren't paying more tax than necessary, follow these steps:
- Check your Xero: Ensure all your invoices and expenses are up to date. You can't know how much you can safely take out if your bookkeeping is behind. If you need help with this, check out our accountancy updates.
- Review your "Distributable Reserves": Just because you have £20,000 in the bank doesn't mean you can take £20,000 as a dividend. You must have sufficient post-tax profit.
- Check your Personal Income: How much have you already taken in salary and dividends since April 6th, 2025? Are you close to the next tax threshold?
- Consider "Crystallising": If you have the profit and the room in your tax band, consider declaring and paying that dividend before April 5th.
- Talk to Dan: Don’t guess. The rules around HMRC compliance and profit extraction are complex. A quick 15-minute chat now could save you a four-figure sum later.
How Harrison’s Accountancy Can Help
At Harrison’s, we love working with the creative community. We understand that you’d rather be focusing on your lighting rig, your edit, or your production schedule than worrying about the fine print of a tax reminder.
But we also know that you work incredibly hard for your money. Seeing 2% more of it disappear into the Treasury's pockets just because of a timing issue is frustrating. Our job is to be your "Director of Finance," making sure your business structure is as polished as your showreel.
Whether you are a camera op based in Biggleswade or a producer working across Bedfordshire and London, we are here to help you navigate the 2026 tax shifts.
Don't let the credits roll on the 2025/26 tax year without a final review of your profits.
If you’re feeling the "feast or famine" pressure or just want to make sure your Limited Company is running as efficiently as possible, get in touch. Let’s make sure your profit extraction strategy is ready for its close-up.
Want to stay ahead of the curve? Keep an eye on our news section for more updates on the 2026 Spring Statement and how it affects local business owners.
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