Are you prepared for the tax year end?

Moore Stephens South Partner Robert Newman looks at key tax considerations ahead of the 5 April tax year end.

 

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The tax year end is not far away, and now is the time to review your tax affairs for opportunities to save money. To help you do this I am going to talk through some key areas for consideration. This is not an exhaustive list and you should always look at your own personal circumstances and take professional advice where appropriate

After the fifth of April there are some relatively small changes in the rates of  personal allowance and the tax bandings, but if you are on the borderline of these bandings, you should investigate ways that could allow you to stay in the lower band

For those of you with taxable income in the range 100 thousand pounds to 118 thousand pounds you will be taxed at a marginal rate of 60% due to the restrictions of personal allowances. This is a penal rate of tax that with some planning you maybe able to avoid, possibly by making a pension contribution?

On the subject of pensions, the annual Pension contribution limit is £50,000 for this tax year but reduces to £40,000 for next year.   So that you can set any pension payment contribution against this year’s income, don’t leave the payment to the last minute, it must be paid by fifth of April

...and, if the value of your pension fund is over £1.5m you should speak to your Financial Advisor as you may have to make an election for fixed protection of your fund before fifth of April because the lifetime limit is being reduced to £1.25m after that date

ISA’s – they are easy to forget, but don’t, they are a valuable long term investment in a tax free environment

Moving on to child benefit – If one member of your family unit – and  this includes married couples, civil partners and other couples living together as if married or civil partners – has an income of £50,000 or more, you will lose part of your benefit if your income is less than £60,000 and all of it if it is greater than this amount. Is there anything you can do to redirect income to your partner to preserve this benefit?

Finally, remember you are able to give away £3,000 each tax year (with a one year carry forward option) and again this must be completed by fifth of April.

If you need any help in any of these areas please contact your nearest Moore Stephens office for advice.

Contacts

UK tax contacts