dos and dont's you should consider before 5th april to save taxDOs and DON’Ts to save Tax in 2019

 

THE 16 DOs & DON’Ts

 

DO use everyone’s Income Tax                   DON’T waste the Savings 

Allowance                                                      Allowance 

The first £11,850 of income is                        For most people the first £1k of 

tax free – can any income                               interest is tax free -move savings

be transferred to your spouse?                        to a spouse to use this allowance.

 

DO make a donation to charity                    DON’T lose your Pension        

                                                                        Allowance 

Higher rate taxpayers should                          Use the annual £40,000 

do so before 5th  April as it will                        allowance– if unclaimed for 

save at least 20% tax this year.                      3 years it is lost forever.

 

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

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

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

 payers but could be more.                             to reduce income – thus less of the 

Companies would save corporation               of the tax free benefit is lost.     

tax on pension payments made                                                                  

 for directors.                                              

                                   

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

Tax Allowance                      

To use this £11,700 tax free allowance    Use (or lose) the annual £20,000

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

5th April before buying                                  any cash ISA’s elsewhere to get a

the shares back in say a month’s time.         better return?

 

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

if under 40                    

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

into a Lifetime ISA – any                               equipment/ van must be bought 

payments are topped up by a 25%              before the year end.

bonus from HMRC.                      

                                                                                           

 

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 (thus 

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

tax return – it could save you capital.            (eg pension payments) or by selling / 

gains tax in the future                                    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,               Spending the cash before the year 

then pay them –    what they receive            end will mean you save the tax and 

is likely to be tax free AND your                    improve your cashflow this year.

business saves tax at the same time.                     

 

DO use all your Dividend Allowance         DON’T lose Married Couples 

                                                                      Allowance

If dividends are more than £2k (which           Basic rate taxpayers can give 10% 

is dividend tax free) then move shares         of their Income Tax Allowance to their 

(eg to a spouse) OR change Investment      spouse saving £237 in tax. If unused you

portfolio to use this tax free allowance.        can also claim for last 2 years.                                                                       

 

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. Whilst we endeavour to ensure that the information contained in the article and attachments is correct, no liability  will be accepted by KMA Accountancy which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action, inaction  or decision taken as a result of using any such information.

 

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