In the world of tax and accountancy, spring means the end of the financial year, which is April 5th.
So, in this update we focus on helping you make sure that you have organized your finances for the past year in the most tax-efficient way.
Wishing you a very Happy Easter!
April 5th – End of Tax Year Opportunities to Save
If you are self-employed:
- Maximize your expenditure before 5th April
- Delay issuing invoices until after 5th April
- Consider making capital purchases (e.g. vans, tools, computers) before 5th April
- Use spouse and family personal tax allowances – £11,500 each per year
- Use your transferrable allowance for married couples if one of you is not using their personal allowance of £11,500
Tax-free saving! Have you used your ISA allowance of £20,000?
- Help to Buy ISA – if you have children looking to buy a property, If they have saved £12,000 the government will pay a maximum bonus of £3,000
- Inheritance ISA – allows spouse or civil partner to inherit without paying inheritance tax
- Lifetime ISA (LISA) – a UK resident aged between 18-39 can contribute up to £4,000 per year and the government will add a 25% bonus at the end of the year
- Flexible ISA – allows you to withdraw and replace money in the ISA
- Innovative ISA – lets you put savings with peer to peer lenders or crowd funding websites
Minimise Inheritance Tax
- Annual exemption £3,000. Or £6,000 if no gift in previous tax year
- Small gifts exemption of £250 to as many people as you wish
- Normal gifts out of income (birthday, Christmas etc.) are also exempted
- Consider pension contributions, especially if you are a higher rate taxpayer
- There is a Capital Gains tax exemption of £11,300 to crystallise an investment gain. But you cannot sell and repurchase shares within a 30-day period
Tax Savings for Buy to let properties
- Borrow down on any increase in capital value with no income tax consequences
- Use capital proceeds to invest in a pension. Or invest directly in another property as a deposit
Let a room in your home Tax Free!
- Up to £7,500 a year tax-free income, including Airbnb income
Use Gift Aid to Help Charities
- With Gift Aid an £80 donation is worth £100 to a charity
- Gift aid donations can reduce your higher rate tax liability. The charity claims basic rate tax.
Need help or advice? Get in touch on 01273 474885
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Our address is:
JDA Tax & Accountancy Services Ltd
Suites 2 & 3 Marine Trade Centre
Brighton BN2 5HA
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