Your Tax Saving Checklists before tax year-end on 5 April
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 of tax saving opportunities to consider for both personal and business taxes before the 5th April 2022.
Personal Taxes Checklist
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 used your ISA allowance (up to £20,000 tax free) before 5th April 2022?
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’s and VCT before 5th April 2022?
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 persona allowance?
Leading on from above, are you investing enough into your pension? We all have an annual pension allowance of £40,000 a year, 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 £40,0000 each, that you may be able to make use off before 5 April 2022.
Have you considered setting up pension plans for your children or grandchildren or paying towards their Junior ISAs?
Have you fully utilised your annual exemption or capital gains tax relief before 5th April 2022? We each have £12,300 of annual exemption in a tax year, where we can enjoy any gain in sold assets before paying capital gains tax.
Have you considered transferring some assets to your wife/husband/spouse before making disposals so that you can make use of both your annual exemptions?
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?
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
Business Taxes Checklist
As business owners, you can decide on the timings of dividends bonuses to minimise your income tax liability.
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
There are some considerable capital allowance reliefs available, such as Super Deduction, that means if you plan on investing in new equipment, such as a laptop, phone, or even machinery, you could help to reduce your corporation tax bill in the year of purchase
If you are planning to make a business investment, consider financing options that could help you maximise the tax reliefs available whilst 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 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
