Getting ready for the end of the tax year
Contractors naturally spend most of their time either working hard for income, marketing and networking to win the next piece of business. After all, ensuring the business keeps rolling in is what keeps the money coming in! However, as a result, the tasks of doing accounts and keeping tax matters up to date can end up taking a back seat and important items can get left un-done. Unfortunately, leaving these things to the last minute not only creates a stressful rush to get them completed at the end of the tax year; it can also end up costing contractors’ money. This could be from missing out on tax breaks and paying more tax than is necessary or simply because returns are filed late and incur HMRC penalties. Even those who have a contractor accountant could potentially lose out, as they will still need to submit the right information, in good time, to benefit from their accountant’s knowledge and expertise.
If you are a contractor with a Limited Company set up, taking into consideration a few key points in advance of deadline dates can really help.
5 things to think about for the end of the tax year
- Check that you have fully utilised your personal tax allowance and taken all of the tax free dividends available – if you’re not sure then ask your accountant to double check for you.
- Make sure you have made full use of your ISA allowances to get the most of your tax free savings and interest.
- Confirm that you have maximised your pension contributions. You can contribute up to £50,000 per year. Any employer contributions will also help to reduce the corporation tax for the company.
- If your income is close to the higher tax rate threshold, or has slightly exceeded it, consider making a charitable donation to extend the basic rate band.
- In preparation for the self assessment, allow enough time to request and receive all the relevant paperwork for your income and investments, such as interest statements. This will make sure that it can be prepared by you or your accountant without delays.
All of these points will contribute to making sure you are getting the most out of your income as well as allowing plenty of time for you and your accountant to get the relevant information together. Overall these will help to make the tax year and the submission of your self assessment tax return an easier, more relaxed process.
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.