Preparing for the Tax Year End

As the tax year draws to a close on 5th April, now is the perfect time to review your financial affairs and take advantage of any available tax planning opportunities. Proper preparation can help you minimise liabilities and avoid last-minute stress. Here’s what you need to consider before the tax year-end.

As always please do not hesitate to contact us, we would be delighted to have a chat.

For Individuals:

Maximise Your ISA Allowance

The annual ISA allowance for 2024/25 is £20,000. This is a use-it-or-lose-it allowance, meaning you can’t carry it forward. Consider maximising your ISA contributions to shelter savings from tax.

Utilise Your Pension Contributions

You can contribute up to £60,000 into your pension and receive tax relief. If you have unused allowance from the previous three years, you may be able to carry it forward.

Use Your Capital Gains Tax (CGT) Allowance

For 2024/25, the CGT annual exemption is £3,000. If you have investments with gains, consider realising some profits before 5th April to take advantage of this tax-free amount.

Gifting to Reduce Inheritance Tax (IHT)

You can gift up to £3,000 per year without it being added to your estate for IHT purposes. If you didn’t use last year’s exemption, you can carry it forward one year, potentially giving away £6,000 tax-free.

Consider Charitable Donations

Donations to registered charities under Gift Aid can reduce your taxable income, which may be beneficial if you are close to the higher tax bands.

For Your Business...

Claim Allowable Expenses

Ensure all allowable business expenses are claimed before the year-end, including home office costs, travel, and professional fees. Keeping accurate records will help support your claims.

Take Advantage of the Annual Investment Allowance (AIA)

If you are planning to invest in new equipment, doing so before 5th April could allow you to claim 100% tax relief up to the AIA limit of £1 million.

Directors’ Dividends

Consider paying dividends using your £500 tax free dividend allowance if you are a shareholder. Please ensure dividend payments are within the company’s profit levels.

Taking action now can result in significant tax savings and a smoother start to the new tax year. If you need advice tailored to your circumstances, then please get in touch

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