Future proofing your personal tax affairs

This year has brought a whole raft of unprecedented challenges, and now as we enter into a second lockdown times ahead are looking even more uncertain.

With the ever changing circumstances we are living in, there has never been a better time to start reviewing your personal tax position, to ensure you’re in the strongest position possible as we approach the turn of the year and to help manage whatever the future might bring.

I’ve outlined three of the main personal tax concerns that are coming up in conversations with clients as of late.

Deferring Self Assessment payments

Because of the financial implications of the pandemic, the deadline for self assessment returns was pushed back from July to 31st January 2021. Meaning you won’t be liable for any late payment penalty charges until this date.

If you don’t think you will be able to pay in full by this date, you are automatically allowed to pay your tax in installments through the HMRC’s Time to Pay scheme, if: your returns are up to date, you owe less than £30K, don’t have any other payment plans set up or debts with HMRC and it’s under 60 days after the deadline.

If you do not meet those criteria, you can still speak to HMRC to discuss your situation and look to negotiate a Time to Pay arrangement.

Tax rates

The Government’s support measures have been a lifeline for thousands of business and employees across the country over the course of this year. As we enter into the second national lockdown, the extension of the furlough scheme until the end of March will be a sigh of relief for many.

However, with over 1.2 million employers furloughing their staff and £41.4bn having been claimed on the scheme, the inevitable questions are starting to circulate: when and how is the significant public spending going to be clawed back?

Whilst we can never predict what will actually happen with changes to tax, it certainly has to be considered that we may see rising tax rates, with Capital Gains tax being an area where the current rate is very low and could very well be reviewed by the Government. If you have any concerns in this area, please get in touch and we can discuss your position and any options you might have.

Inheritance Tax (IHT)

Many clients are reviewing their IHT position and taking steps to lessen the impact of the tax whilst still staying compliant, whether it’s through gifting assets or Family Investment Companies.

The rules surrounding IHT can become very complex very quickly, so we would always recommend consulting a professional on the matter.

How can we help?

When looking at the road ahead, times may seem daunting. But working closely with your advisors can will help to place you in a more robust and compliant position when it comes to your personal tax affairs.

Our team of experts are here to support you every step of the way when it comes to navigating the road ahead. Get in touch to find out how we can help.