After the madness of December and January we like to try and spend some time with client’s and suggest a few ways in which they can either make the most of their money and/or reduce their current year tax liability.
This can take a few different avenues depending on the type of business and level of profits but the main ones are:
ISA Allowance and new Personal Savings Allowance (PSA)
The limit for 2016/2017 tax year is £15,240 and is the maximum amount you can deposit into your ISA. If you’ve not deposited this amount in this tax year you’ll lose it so consider topping it up on or before the 5th April 2017.
All basic rate taxpayers can now earn £1,000 of savings interest a year without having to pay any tax in it.
If you’re a higher rate taxpayer, paying tax at 40% rate on income between £43,001 and £150,000, you’re entitled to a lower PSA of £500 a year.
If you’re an additional taxpayer earning £150,001 or more, you won’t get an allowance at all.
The new rules that came into force in April 2015 have made pensions a potentially great way to help fund your retirement. They are also a great way of reducing or mitigating both your company’s corporation tax liability and your personal income tax liability.
They can also help getting back your personal allowance where your income exceeds £100,000 per annum either in full or in part.
And they can also stop you having to repay any child benefit where your income exceeds £50,000 per annum.
If you have pensions or don’t – and would like to find out more then please don’t hesitate to give us a call for a no-obligation meeting.
Plant and machinery – Annual Investment Allowances (AIA)
The current AIA is £200,000 which means you can deduct the full rate of an item that qualifies for AIA against your profits before tax.
The timing of the purchase of plant and machinery is important if you’re are purchasing over £200,000 worth.
Anything above the £200,000 limit can only be claimed against your profits at 18% each year.
This is important near to either the end of the tax year or your accounts year so please give us a call and we can chat it through with you.
Rob “Saving you money” GreavesShare