End Of Year Tax Planning
Time is quickly running out for end of year tax planning!
Individual Tax Allowances
Make sure you make full use of your ISA and pensions allowances before 5 April if you are planning to save or contribute to your pension. Contact us if you want to discuss any proposed contributions and their tax implications.
For those with flexible drawdown pensions, it is the perfect time to assess other income for the year, and decide if it makes sense to access drawdown policies to make use of 'spare' tax bands.
If you haven't already claimed to transfer your spouse's marriage allowance where it is beneficial to do so, you have until 5 April to do this online, and ensure that the claim can be backdated to the preceding tax year. Get in touch to see if you could benefit from this saving - potentially up to £220 each year!
If you are considering any capital expenditure in the near future you should evaluate whether this is possible before 5 April for partnerships and Sole Traders, or 31 March for businesses and companies with a 31 March accounting year end. This will accelerate the timing of Annual Investment Allowances, so you can have 100% of the value of the asset offset against the current year's profits.
With the new dividend rules in effect this year it is more important than ever to consider whether it is worth paying a dividend from your retained profits before 5 April. Everyone, regardless of other income, now receives £5,000 per annum of dividend income taxed at 0% - ensure that you declare a dividend up to £5,000 before 5 April if you haven't already done so and there are sufficient profits.