Year End Tax Planning

Now that the self-assessment filing deadline is past it is time to turn our thoughts to any tax planning measures which need to be implemented before the end of the fiscal year on 5 April.

Here are a few tips worth consideration:

PENSION CONTRIBUTIONS

If you are an additional rate taxpayer maximising the contributions in 2012-13 will save tax at 50% rather than the 45% scheduled for the next tax year.

GIFT AID DONATIONS

Again if you are liable to tax at 50%  and are considering a significant gift aid donation in the near future ensure that it is made before 5 April to gain maximum relief.

LOSS RELIEF

At present if your business (not Ltd) makes a loss this can be offset against other income received in the year of the loss or the preceding year. From 6 April 2013, however, this relief will reduce to the greater of either £50,000 or 25% of the total income in the year. If you are in a loss position now and are considering buying equipment plant etc it may be advisable to do this before the year end.

DIVIDEND INCOME

If you control your own Company you would be well advised to delay any dividend payments until after 5 April if you are an additional rate payer. The current dividend rate of 42.5% will reduce to 37.5% from 6 April 2013.

CLASS 2 NIC

Self – employed people who had profits of less than £5,595 in 2012/13 can complete form CF10 to clam exemption from payment of Class 2 NIC. It is best to claim this exemption before the start of 2013-14

If you require any further information please contact Green & Co.