the 16 dos and dont's you must read before 5th AprilThe 16 Dos and Don’ts you need to consider before 5th April in order to save Tax

THE 16 DOs & DON’Ts

 

DO use all your Dividend Allowance                          DON’T waste the Savings Allowance

This is being reduced from 6th April to £2k so                For most people the first £1k of interest 

companies should increase dividends paid.                   is tax free – move savings to a spouse 

                                                                                        to use this allowance.

           

DO use everyone’s                                                       DON’T lose the  

Income Tax Allowance                                                 Married Couples Allowance

The first £11,500 of income is tax free, can any            Basic rate taxpayers can give 10% of 

income be transferred to your spouse?                         their income Tax Allowance to their 

                                                                                       spouse saving £230 in tax.

 

DO make donations to charity                                    DON’T lose your Pension

                                                                                       Allowance       

Higher rate taxpayers should do so before                   Use the annual £40k allowance – if

5th April as it will save at least 20% tax                        unclaimed for 3 years it is lost 

this year.                                                                        forever.

 

DO make a pension payment                                     DON’T lose your Child Benefit

Payments made should lead to a tax                            Starts to be lost at £50k of income.                 

refund of 20% for for higher rate tax payers .                Make pension payments/donations

Companies can make payments                                   to reduce income – thus less of the 

on behalf of directors –                                                   tax free benefit is lost.

those payments save corporation tax.           

                                 

DO use your Capital Gains Tax                                 DON’T lose your ISA Allowance

Allowance                                  

To use this £11,300 tax free allowance,                       Use (or lose) the annual £20k 

you could sell some shares before                               allowance. May be worth moving

5th April before buying the shares back                       any cash ISAs elsewhere to get   

in say a month’s time.                                                  a better return?     

 

DO use your Lifetime ISA Allowance                       DON’T wait to buy equipment or

if under 40                                                                   vans

You can put £4,000 a year into a lifetime                    To get the tax relief this year the 

ISA  – any payments are topped up by a                     equipment or van it must be bought 

25%  bonus from HMRC.                                            before the year end.

 

DO make a ‘negligible value’ claim                         DON’T be hit by the interest

                                                                                    restriction 

Include the loss made on any failed                           Landlords can avoid this 

company  shares (eg Carillion) on your                      (thus saving tax) by reducing 

tax return –   it could save you capital                         their income (eg pension payments)

gains tax in the future.                                                 or by selling / transferring a 

                                                                                    property or two.

 

Do put your children on the payroll                         DON’T put off business 

                                                                                     expenditure        

If they’re helping in your business, then                      Spending the cash before the 

pay them – what they get receive is likely                    year end will mean you save the 

to be tax free AND your business saves                      tax and improve your cashflow 

tax at the same time.                                                    this year.

As always, if you’re not sure on anything and would like a chat over a coffee, please get in touch NOW on: 0161 410 0023

or email David@kmaaccountancy.co.uk and we’ll be happy to help you.

 

Disclaimer
The 16 DOs and DON’Ts is designed to alert you to some of the major issues you should be considering and especially before 5th April 2018. It is not a replacement for professional advice tailored to your precise needs and circumstances. It is important that you take professional advice before making any decisions based on the information that you learnt here. While every effort has been made to make sure it is accurate it cannot be precisely tailored to your personal circumstances.

 

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info@kmaaccountancy.co.uk

KMA Accountancy
Progress House
17 Cecil Road
Hale
Altrincham
Cheshire WA15 9NZ

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