Tax planning does not have to be a long-winded, expensive exercise – it can be a simple tax health check
Every year, accountants and tax advisers try to remind people to:
- plan ahead in advance of the next tax year
- review their tax affairs before the end of the tax year
- submit their tax return early
Without wishing to make any sweeping generalisations there is, in my opinion, a general reluctance for taxpayers to arrange their affairs in this manner and I suspect that this is based on the feeling that there is a cost to planning with no guarantee that any additional benefits or savings may be derived from this. However, and incredibly importantly, tax planning cannot be done retrospectively - even the most seemingly innocuous transaction can have adverse and inadvertent tax consequences, therefore you ignore our recommendations to plan in advance at your own peril!
A key point here is that tax planning does not have to be a long-winded, expensive exercise – frequently it is a simple tax health check to make sure that there are no unexpected or significant tax consequences to what you are doing or are planning to do. So here are a few heartfelt and practical recommendations for all taxpayers:
Read our tax planning guide – even if for no other reason than it is easy to read and informative. It might also help you understand how changes in tax legislation might adversely affect you, and assist you in formulating future plans.
Read what we send you carefully – often the taxpayer’s focus is on the tax payable, however we always endeavour to highlight other matters that might have an impact on your particular circumstances.
Do not rely upon Google (other search engines are available), the Press, or someone down the pub as a source of tax planning and technical guidance! Put simply, whilst there is always the risk that you might come up with the right answer, typically that is not the case. Tax legislation and interpretation can be complex, and you cannot alter what has been done after the fact if you have acted on incorrect or incomplete advice. If it sounds too good to be true, it usually is.
Pick up the phone – a five-minute conversation with your accountant/tax adviser (in advance!) may provide the reassurance that there are no tax issues to consider or highlight that careful planning is required.
Do it as far in advance as possible:
- Plan ahead of the next tax year as there may be preparatory work needed in advance of the planned transactions in order for them to be tax efficient.
- Review your current year tax position well before the end of the tax year – there may be actions that you can take that will help minimise your tax.
- Submit your tax return as soon as possible – that way you can plan ahead for any tax liability, but it also potentially reduces HMRC’s window of opportunity to review your tax return.
So, with no apologies whatsoever for banging the same drum:
- In advance.
- Seek advice from an appropriately qualified individual (ideally one working in a regulated environment – not all accountants and tax advisers are regulated).
And read our tax guide for some helpful tips on planning for your year-end!
How can Haines Watts help?
We advise clients with a broad range of tax and compliance matters throughout the South West region.
If you would like to have a conversation, please get in touch with your usual Haines Watts contact.