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[19.02.2019]

Tax Planning – Time to take action

The current financial year in the UK ends on 5 April 2019. If you wish to take any action to reduce your liability to tax for the 2018-19 tax year time is running out. The 5th April 2019 is now less than two months away.

Individuals and unincorporated businesses with an accounting year end close to, but prior to 5 April 2019 may be able to take advantage of a range of tax planning ideas as long as action is taken before 5th April. For incorporated businesses any changes in Corporation Tax rates, allowances etc. take place on 1 April. However if the planning concerns individuals, e.g. employees 5th April will be the key date. It is important to note that planning opportunities may apply in respect of Income Tax, Capital Gains Tax, National Insurance and VAT.

What do you need as a basis for effective planning?

Businesses

For all businesses up to date reliable management accounts are essential. Some form of forecasts (covering both profitability and cash flow) would also be very helpful. Many businesses use some form of accounting software. Increasingly we are recommending cloud accounting systems (e.g. QuickBooks Online and Xero) to our clients. Not only can they help you keep up to date records they can also save you time, provide more timely information to help you manage your business on the go and enable you to share information with your accountant and other advisers more easily. We covered the benefits in more depth in our Cloud Accounting blog series, click here to read more.

Individuals

For individuals it will vary depending on circumstances.  At the simplest level it will be having an understanding of your expected income for the tax year, eligible deductions and your available cash resources.

Tax planning ideas

Over the next few weeks we will be publishing a series of blogs outlining tax planning opportunities for individuals and businesses. These will include areas such as allowances that may be available, timing of asset purchases or pension contribution payments, gifts that could be made to family members or charities and remuneration planning. Please be aware these will be suggestions that may or may not be applicable to you and your business. In addition saving tax in the short term may not be best for you or your business in the longer term. We recommend speaking to your accountant or another adviser before implementing any planning ideas to ensure it is the right thing for you or your business

Organise a tax planning review now

Whether or not your personal or business tax affairs are complex, make sure you avail yourself of this moment of reflection before 5 April 2019. Once the date is passed, there is no chance the clock can be turned back.

Although the outcome of the Brexit referendum and negotiations are still not certain it appears likely that from the end of March 20019 our present relationship with the rest of Europe will change. This will add further to the usual pressures faced by UK businesses. There has never been a more opportune moment to take time out from running your business to consider your plans not only for the current tax year, but further ahead as well.

As time is limited please call now to discuss your options.

Ian Lowry

 

 

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