The UK tax year runs from 6 April to 5 April of the following year. Here are some end of year tax planning tips:
- Make use of ISA’s – these accounts allow you to save and invest tax-free so consider making use of your ISA allowance before the end of the tax year
- Utilise pension contributions allowances – the current annual allowance is £40,000 so consider making a contribution before the end of the tax year to reduce your taxable income
- Take advantage of capital gains allowances. If you are planning to sell investments, consider timing the sale to make use of your annual exempt amount. For 2022/23 this is £12,300 but is reducing to £6,000 for 2023/24
- Ensure you make the most of your dividend allowance before 5 April as the allowance is set to reduce from £2,000 to £1,000 after this date
- Consider investing in plant and machinery or research and development if you are a business owner in order to take advantage of generous reliefs against tax
- Review your tax code to make sure it is correct as incorrect tax codes can result in you paying more tax
- Use gifts to reduce your estate for inheritance tax and to utilise the annual exemption which is £3,000 per year. If you made no gifts last year then you can carry forward last years annual exemption meaning you could make a gift of £6,000 in 22/23 and it would be exempt from inheritance tax
- Consider your tax residency – if you spend time abroad consider the implications of your residency status as being non-UK resident can affect your liability to UK tax
It is important to note that tax planning should be considered in the context of your overall circumstances. Before undertaking any of the above tax planning it is important to take advice from a qualified professional.
Please therefore do not hesitate to contact us if you require any assistance with your personal or business tax affairs.