End of the tax year is coming. 5th April is a momentous day for us, but we appreciate we may be alone in this and it could slip under your radar….
So, we thought we would put together “5 top tips” for you, in conjunction with the amazing independent financial advisors we work with.
Before taking action, please ensure you speak with your FCA registered Independent Financial Advisor (IFA) and your accountant.
Ok, eyes down, here we go with our 5 top tips
1) ISA allowance
Did you know you can put in up to £20,000 into an Individual Savings Account (ISA) between 06/04/22 and 05/04/23, which comes with very good tax-efficient benefits?
Worth also considering whether your partner has done the same (they get £20,000 too).
Potentially £40,000 can be invested but you must do this prior to 05/04/23.
Given the increase in interest rates over recent months, individuals holding large amounts of cash based savings may end up receiving interest income which is larger than their personal savings allowance, an ISA could help to avoid this, your IFA can show you how.
You can put in up to £9,000 per child into a junior ISA. A great way of passing money to future generations tax efficiently. Ensure you get the right account opened and make sure you use the 2023 allowance before 05/04/23.
2) Pension funding – for you personally
Investing into a pension is a great way to save for future retirement, and potentially benefit from tax savings today.
If your income exceeds £50,270, you can save significant values of tax by investing into a pension.
The amounts you can invest differ depending on your previous investments, so it is best to get in touch with your IFA who can help you understand the benefits before you make the investments.
If you’re a high earner, you may be able to bring your taxable income down by putting more money in your pension. These can include:
Bring your income down below the additional rate tax band, which starts at £150,000 (£125,140 from 6/4/23)
Help you hold on to your Personal Allowance, which is slowly withdrawn once you earn over £100,000, and could help you avoid a 60% tax rate
Help you hold on to your Child Benefit, which is gradually withdrawn if one parent in the household earns more than £50,000
Word of warning – if your income exceeds £200,000 you may be hit with a nasty tax hit (known as tapering) if your pension investment is not planned.
3) Pension funding – from your limited company
If you own a limited company, setting up a pension scheme and investing into this for your team (including yourself and family members if employed by your company) is a great way to reward them with (potentially) no tax or national insurance due.
If you are one of the employees, you can use the pension investment as a tax planning tool for the company. Any pension investment to an employee can obtain corporation tax relief on the sums invested. So a £40,000 pension investment would save corporation tax of £7,600 (at the current corporation tax rate of 19%, don’t forget this is set to rise to 25% from 01/04/23).
Word of warning – It is always worth considering the personal impact of pension investment when looking at the company angle.
4) Utilising the Capital Gains Tax (CGT) allowances
From 6/4/23, the CGT tax-free allowance will fall from £12,300 to £6,000, and then to £3,000 in 2024/25. Making sure you’re using losses and realising gains at the most appropriate time can make a big difference to the amount of tax you have to pay.
5) Check how closely your IFA and accountant work together
We have great relationships with the independent financial advisors we recommend and always work collaboratively with them. This has a tangible benefit to many of our clients as they receive the best financial investment advice along with the knowledge that any tax impact is reviewed before an investment is made.
If your IFA and accountant are not working side-by-side, maybe it’s time to see how this can benefit you.
Dominique’s exceptional service ethic stems from her deep commitment to our clients and their businesses. Solving any issues that may arise in a professional and approachable manner, Dominique’s knowledge of accountancy and experience in client facing roles facilitates our client support.
Our friendly customer service team are on hand to help with any queries you may have.
19 October 2023
We moved our accountancy needs to Steven Burton and Co - specifically with David. It’s been night and day compared to our previous provider - we now have a partner who is helping us to develop our business and in a way that means we have long term security. Local, accessible and responsive - everything we need in a company that provides business critical services.
26 June 2023
The team here are fantastic - every detail thought of and explained clearly. I have no hesitation in recommending Steve and the team to any business, be it fledgling or established.
You get what you pay for and more.
20 June 2023
The team at Steven Burton & Co have been lovely to work with, helping us with our partnership accounts over the last couple of years. They are always on hand to answer any queries we have and are happy to explain in as much detail as we require. Everyone we have spoken to has been polite, welcoming and extremely knowledgeable and we look forward to continuing to work together as our business grows.
12 May 2023
A truly fantastic accountants. Unlike any other accountants we have had in the past. They are 100 percent on the ball, helpful with fantastic advice. Not just sound accountancy advice but advising the business as a whole in various areas. Strategic quarterly reviews to really delve into the business to make sure profit margins are where they should be, and if they aren’t, they’ll look into improvements that can be made. Nothing is too much and the phone lines are always open for advice. Unlike most accountants their focus isn’t just on completing your annual accounts and not seeing you again for another year. I cannot praise the team enough for all the hard work they put in! They really have shifted our focus onto the aspects of the business that we were perhaps neglecting!
11 May 2023
The team at Steve Burton & Co provide a first class personal service to their customers. They support business owners through every step of the life cycle of their business, adding true value with their relationship.
5 May 2023
I work closely with the team at Steven Burton & Co. to assist their clients with a range of services and I can't speak highly enough of the professionalism and care that they demonstrate for their clients.
21 March 2023
I've worked with Steven Burton & Co for almost 4 years and I cannot fault their service. Dominique in particular is always available for advice and guidance whenever needed.
11 December 2022
The team at Steven Burton are friendly, professional and really get to know their clients so their advice is tailored to suit their individual needs. Cuts through all the jargon and offer clear and timely advice. Would highly recommend.
28 November 2022
I've worked with Steven Burton & Co for the last 2.5 years and thoroughly recommend their services, based on my experience of working closely with the partners. From sound advice to critical content on what is important for businesses in all aspects of finance and accounting, their passionate approach to helping businesses to manage growth and financial health is highly recommend.
21 June 2022
Steve Burton & co are industry experts. The team are always on hand to offer expert advice and consultancy. Providing a much needed level of confidence and we feel a great sense of relief knowing that the business finances are in good hands.
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