Tax planning tips for the year end

Published on 12th December 2016

The end of the tax year may be in April, but it is never too early to start planning to make the most of the tax-saving opportunities available to you and your business.


Are you getting the most out of capital allowances?

Since 1 January 2016 the majority of businesses have been able to claim a 100% Annual Investment Allowance on the first £200,000 of expenditure on most types of plant and machinery. Please contact us before investing as we can help to ensure you receive the maximum tax benefit from your purchase.

Time to review your business motoring?

It may well be worth carrying out a complete review of your company car policy, as year on year the percentages and therefore the taxable benefits on cars are increasing. For more information, please see our business motoring article in this issue.


Are you taking advantage of the 2016/17 ISA allowance?

UK resident individuals 18 and over can invest in any combination of cash or stocks and shares up to the overall annual subscription limit of £15,240 in 2016/17. However, a saver may only pay into a maximum of one Cash ISA, one Innovative Finance ISA and one Stocks and Shares ISA each year.

There are different rules for under 18’s. If the ISA provider allows it, cash withdrawn since April 2016 can now be replaced in the same tax year without using the annual limit.

Can you avoid the 60% ‘hidden’ tax rate?

In addition to paying a tax rate of 40%, any income over £100,000 triggers a loss of personal allowance at a rate of £1 for every £2 earned. This effectively means that anybody earning over £122,000 will be paying an effective 60% on that £22,000 band. Similarly, high rates of tax apply to those individuals who receive Child Benefits and have income of £50,000 and £60,000. If this affects you, you could consider increasing pension contributions or deferring income, for instance. Talk to us to establish the best options for your circumstances.

Timing is crucial when planning for the year end. Please contact us for advice on the tax-saving strategies that may be available to you.