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Think ahead to avoid huge tax bills
Shropshire taxpayers should take action now if they want to minimise the tax bill they will face at the end of the current financial year.
Keith Winter, from Dyke Yaxley Chartered Accountants, in Shrewsbury, said it was vital that tax payers made the most of the allowances and opportunities available in the run up to 5 April.
"It's important to plan ahead now, as the last three months of the financial year will be over all too soon. And from April onwards, a new top rate of income tax of 50% will be introduced for anyone earning over £150,000.
"If you think you may be affected by the new rate, you should consider paying dividends or bonuses before the end of this financial year to help reduce its impact.
"Or if you are self-employed, why not change your accounting dates to shift profits into the 2009/10 financial year instead?"
Keith said taxpayers should also make the most of their tax free Individual Savings Account (ISA) allowance.
"Remember that since October last year, anyone aged 50 and over can invest up to £10,200 (£5,100 in cash).
"All other adult savers can invest £7,200 (£3,600 in cash) for the current financial year, and from 6 April, all adult savers will be entitled to the higher allowance."
For business owners, Keith said there were many well-documented ways to extract profit from a company, but a wide range of alternative options that were less common could also be useful.
"These might include using tax-free allowances such as mileage payments, and tax and national insurance-free childcare vouchers for parents of young children. Employer pension contributions can also be a tax-efficient way of extracting profit from your business too.
"The main message is that it's crucial to take action now, well before the end of the financial year approaches, in order to minimise your tax responsibilities as far as possible."
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