Your Tax Year-End Financial Checklist
Before the current tax year-ends, it is worth asking yourself if you have utilised all tax reliefs and exemptions available to you, your family and your business.
To help you, we have provided a checklist of tax-saving opportunities to consider for both personal and business taxes before the tax year-ends on 5th April 2024.
Personal Taxes
Have you used your ISA allowance (up to £20,000 tax free) and your Junior ISA allowance of £9,000?
If your income is over £100,000, have you considered making charitable donations or a one-off pension contribution to bring your taxable income down to preserve your personal allowance?
Leading on from above, are you investing enough in your pension? We all have an annual pension allowance of £60,000 a year currently, which allows us to save into our pension tax-free and any contributions reducing our overall taxable income. You may also have potentially unused pension allowance from the previous three years of between £40,0000 -£60,000, that you may be able to make use off before 5 April 2024.
Personal Savings Allowance - are you using up your annual savings allowance? You can save up to £1,000 a year in tax-free interest in a tax year without incurring a tax liability
Have you considered setting up pension plans for your children or grandchildren?
Do you have any assets that generate income as a couple, such as a rental property or investments? If so, you could look to minimise higher and additional rate taxation next tax year by transferring these to the lower-income earner in your couple to maximise your tax free savings and dividend income limits.
Have you fully utilised your annual exemption or capital gains tax relief before 5th April 2024? We currently have £6,000 of annual exemption where we can enjoy gains from sold assets £6,000 and above, before paying capital gains tax. The annual exemption will reduce to £3,000 from April 2024, so now is the time to consider selling assets before this tax relief reduces further.
Have you considered transferring some assets to your wife/husband/spouse before selling assets so that you can make use of both your annual exemptions?
If you have the cash flow as a higher or additional rate income tax payer, have you made any tax-efficient investments, such as EIS, SEISS and VCT before 5th April 2024?
Have you thought about how you will pass on your estate to the next generation or make gifts to use up your annual inheritance tax exemptions? For example, you can make cash gifts up to £3,000 before 5th April 2024
Please get in touch if you would like to discuss any of the above in more detail before 5th April 2024 or for forward planning next tax year.
Business Taxes
As a business owner, you can decide on the timings of dividend and ensure you are making the most of the dividend allowance of £1,000 before 5th April 2024, when it will reduce to £500 from 2024/25
Cash flow permitting, you could consider increasing your company’s pension contributions to the directors or business owners to enjoy a reduction in your corporation tax bill.
If you are planning to make a business investment, consider financing options that could help you maximise the tax reliefs available while ensuring you spread the cost over a period of time to help with cash flow management.
Have you looked at whether you are eligible for Research & Development (R&D) tax credits? Any new process to solve an issue in your industry, created by you, could mean you are eligible.
If you have staff, have you looked at the various tax-exempt benefits available throughout the accounting year? Such as electric car charging, mobile phones, pensions to name but a few.
Please get in touch if you would like to discuss any of hte above in more detail before 5th April 2022 or for forward planning next tax year
