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Make the most of tax savings

 

Shropshire entrepreneurs are being urged to ensure they make the most of all possible tax saving opportunities before the end of the current financial year.

Our Tax Planning Consultant, Pam Mason, said there was still time to consider a wide range of options and take professional advice before the deadline on April 5th.

“Now that the self-assessment tax returns have been filed and the tax payments settled, it’s time to turn your thoughts to tax year end planning.”

Pam said business owners were entitled to claim deductions from their income for costs incurred in the running of their business, but putting the rules into practice could be a challenge.

“In most circumstances, you can’t claim a deduction for the depreciation of your assets – such as the company car or office equipment – but deductions may be available on some of your capital expenditure.

“This is why it’s important to take professional advice, as interpreting the tax rules can be complicated, but so worth the time and effort if there are savings that can be found.”

Pam said business owners should make sure they had recorded all their costs accurately and that their records were completely up-to-date.

“You can claim directors’ bonuses as a deductible cost in the current financial year, as long as they are paid within nine months after your company’s year-end. But pension contributions must be paid before the year-end deadline to qualify.”

She said profits could also be extracted through dividends, although these were now subject to new rules.

Individuals should also make sure they have made the most of their personal exemption for capital gains tax.

“Ordinarily each person is entitled to make a tax-free gain of up to £11,100 or up to £5,550 for trusts – after that level, gains are taxed at a rate that is linked to your level of income.

“Married couples and civil partners each have an £11,100 exemption so it’s vital to maximise these allowances and use all the tax-free exemptions available for each family member.

“Planning for the end of the tax year may seem like a complicated and time-consuming exercise, but it’s vital if you want to ensure you’re not missing out on any of the money saving opportunities that are out there.”

Pam Mason, Tax Planning Consultant