As we approach the end of the tax year, it is an ideal time to review your financial affairs.
There are a number of allowances and tax reliefs available which can help to minimise higher and additional rate tax liabilities in the current tax year.
Remember to consider:
* Pension contributions – with income tax relief, at your highest marginal rate, on contributions up to £50,000 per annum until
5 April 2014, and potentially up to £250,000 using pension input periods and carry forward allowances to which you may be entitled.
* ISA allowances for tax-
As we approach the end of the tax year, it is an ideal time to review your financial affairs.
There are a number of allowances and tax reliefs available which can help to minimise higher and additional rate tax liabilities in the current tax year.
Remember to consider:
* Pension contributions – with income tax relief, at your highest marginal rate, on contributions up to £50,000 per annum until
5 April 2014, and potentially up to £250,000 using pension input periods and carry forward allowances to which you may be entitled.
* ISA allowances for tax-efficient income and tax-free gains – up to £11,520 can be invested per person in 2013/14.
* Capital Gains Tax Allowances – it is possible to realise gains up to £10,900 in tax year 2013/14 without being subject to tax.
* Venture Capital Trusts – up to £200,000 can be invested each tax year, providing 30 per cent income tax relief and tax-free dividends.
* Enterprise Investment Schemes – with income tax relief at 30 per cent on investments up to £1m, EISs can be used to defer a capital gains tax liability, and qualify for business property relief to become potentially inheritance tax free after two years.
* Seed Enterprise Investment Scheme – up to £100,000 can be invested in a single tax year providing 50 per cent tax relief in the tax year in which the investment is made.
* Business Premises Renovation Allowance – allowing you to claim tax relief of up to 50 per cent on a city centre commercial property investment with no limit on the amount invested.
Additionally, from April 2014 every business, charity and Community Amateur Sports Club (CASC) will be entitled to an annual employment allowance of £2,000 to reduce their liability for Class 1 secondary National Insurance contributions (NICs), the tax the employer pays on their employees.
This is a good deal for small businesses as it is effectively a tax cut on your employment costs. However, employers will have to opt in to get the allowance, which will be available for the new tax year from 5 April 2014. If you forget to claim, you could miss out.
If you would like further advice on any aspect of tax planning, contact Adrian Urquhart on 01536 461900 or visit the website www.moorestephens.co.uk/eastmidlands