The Secret to Getting Ahead is Getting Started
The UK tax year ends on 5 April 2022 but early planning can help you avoid a last-minute rush or potentially missed opportunities.
Below are some reminders that could help you make the most of your money and ensure that you don’t miss the chance to make the most of valuable tax efficiencies and allowances in your tax planning:
Income Tax & Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. It’s smaller if your income is over £100,000.
Your Personal Allowance may increase if you are eligible to claim Marriage Allowance or Blind Person’s Allowance.
Capital Gains Tax (CGT)
Have you considered using the £12,300 annual exemption? With careful and early tax planning, it could be possible to reduce, eliminate or delay the payment of your CGT liability.
Have you utilised the Dividend allowance of £2,000?
Have you utilised your tax-efficient contributions of up to £40,000 for this tax year or any unused allowances from the three previous tax years?
Individual Savings Account (ISA)
Have you utilised your £20,000 tax-free ISA allowance?
Junior Individual Savings Account (JISA)
Have you considered saving up to £9,000 for your child/children in a JISA?
Lifetime Individual Savings Account (LISA)
Could you take advantage of this tax-efficient saving option if you are between 18 and 40 (up to £4,000 of your £20,000 ISA allowance)?
Have you used your maximum gift allowances and considered any gifts you can make out of income?
Have you considered setting up a Trust to protect and maximise your family’s future assets?
If you are 55 or over, you may be able to start drawing down pension benefits from a personal pension such as a Self-Invested Personal Pension (SIPP), even if you are still working. You may take up to 25% tax-free with the rest taxed at your marginal rate.
Carry forward benefits
Have you claimed your higher or additional tax relief? Have you used the carry forward rules in order to benefit from any unused allowance from the previous three tax years?
Make tax-free pension contributions
Have you considered Salary Sacrifice pension contributions? Where employees exchange some of their salaries in return for pension contributions made by the employer both parties can save on National Insurance contributions.
Research & Development (R&D) tax credits
Have you considered looking into R&D tax relief for SMEs?
When paid through the business, protection such as Relevant Life cover can help reduce corporation tax and avoid paying premiums from taxed income.
Review Employee Benefits
Attracting and retaining key employees is a top priority at the moment – are your benefits fit for purpose and the best value?
Personal circumstances differ and not all of the above is applicable/relevant to every client. For more information or to discuss any of the points raised above, please contact your adviser, or call us directly on 0161 819 1131. Up to date information can also be found at gov.uk.