The end of the tax year is nigh!
The tax year runs from 6th April to 5th April, and it’s your income during that period that will determine your tax liability. But did you know that there steps you can take to reduce your overall tax burden, and that some of these are time sensitive so ensure you consider them before the end of the tax year?
Our top five tips for the end of the year
- Ensure you have fully used your ISA allowance of £11,520.
- If you believe your total income will exceed the basic rate tax band then consider making a personal pension contribution, as this will increase the tax band and therefore decrease your tax liability. Just make sure you’re within the annual and lifetime contribution limits, taking any employer contributions into account. If in doubt, talk to an independent financial adviser.
- Donations have the same effect as personal pension contributions, so consider making charitable donations in order to increase your tax band limit.
- On the other hand if you have not fully used your tax allowances, check to see if your company can pay any further dividends to you. You don’t need to take them, just ensure they are declared before the end of the tax year and credited to your loan account. Your accountant can help if you’re not sure.
- If you are expecting to have capital gains in excess of the Annual Exemption consider whether they can be split across the current and next tax year.
Your contractor accountant should be able to discuss these with you, or refer you to an independent financial adviser if necessary. Don’t miss out, make sure you review your position now before April sneaks up on you!
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.