It has come to that time of year once again…. What time of year is that?
You may be unaware, but now is the time we need to be thinking about what we can do to maximize the tax position at the end of the financial year for your business. The deadline has now passed for the submission of the 2018-19 tax returns, and all tax liabilities should now have been paid.
By carrying out some tax planning, we can ensure any transactions are encountered at the most beneficial time.
Tax planning comes in many forms, from timings of vaccinations, repairs to fleet vehicles, repairs to machinery, the purchase or sale of stock, and many more. We are able to look at this for you, and advise accordingly, through our unique proactive approach to our clients.
If business expense acceleration or deceleration are not appropriate to you and your business, there are many other tools available to you.
- A popular alternative are contributions into Pension Schemes. These are a very tax efficient payment. Tax relief can be provided at the higher rate band. There are conditions to be met for the level of contributions available, and these payments cannot be back dated once the tax year has ended.
- It is also possible to make donations to charity through the Gift Aid Scheme. These payments can allow a charity to claim 25p of tax relief for every pound donated. You may also be able to claim relief if you are a higher rate tax payer.
- Do you receive Child Benefit? If your projected income is likely to be above £50,000 you may become liable to the Child Benefit Tax Charge, it may be possible to reduce your income below this threshold with forward planning.
- Is your income likely to be above £100,000? If so, your personal allowance will be reduced by £1 for every £2, and eventually you will lose the personal allowance all together. This would leave you paying a marginal rate of 60% tax. Speak to us before the end of the year, to investigate what possible solutions there may be.
If you have answered yes to any of the above scenarios, or you would like to put your mind at rest, have a ready of our planning guide and then please contact us. We will work with you to come up with an individual strategy in order to make sure you pay the least amount of tax. Tax planning can not be carried out retrospectively. Once we pass 5 April 2020, almost ALL tax planning options are not available.
Finally, consider your Capital Gains Tax (CGT) position if you are contemplating or are in the midst of the sale of a residential property. Changes coming into effect from 6 April 2020 mean that accelerating the sale to before 6 April 2020, will extend the time you have to report the gain and pay any tax due. If you exchange before the 6 April 2020, any CGT payable will not fall due for payment until 31 January 2021, however, if the exchange date falls after 6 April 2020, the CGT will be payable in 30 days from completion. However, where a gain is fully covered by relief e.g. principal private residence relief, no return is required.
Want to know more? Call us on 01392 260310 or email firstname.lastname@example.org