1. How To Make The Most Of The Next Tax Year: Use Your Personal ISA Allowance
The current personal allowance for an ISA is £20,000, and any returns that are made within the ISA will be classed as tax efficient. This means they are free from capital gains and income tax – and if you don’t use this allowance, it doesn’t carry over! So if you have any savings, you may want to transfer them into a tax efficient ISA once the next year starts. This could significantly reduce how much tax you owe at the end of the next year.
2. Set Up Retirement Contributions
You may also want to consider setting up pension contributions. This means you will have more saved up for when you retire, and it also means you may receive income tax relief. We suggest speaking to your accountant to find out what your allowance for pension contributions is (normally about £40,000) but this can vary depending on circumstance.
3. Consider Making Charitable Contributions
Giving to charity doesn’t just benefit the charity; if you do it as a business contribution, the amount can be claimed for tax-efficient purposes. In fact, if you are a high rate tax payer you may even get a rebate to say thank you for your donation!
4. Don’t Forget About Your Capital Gains Allowance
Finally don’t forget about your capital gains allowance. Every British adult has a yearly capital gains allowance of just over £12,000. This means if you sell any of your assets (such as stocks or property), you won’t be taxed on the net profit. So if you’re thinking about selling anything next year, be sure to take advantage of your capital gains allowance.
Taxes can seem stressful and scary, especially if you are a new business owner, but getting ahead can help you to save thousands. So don’t wait; see if there is anything you can do over the coming weeks to prepare for the upcoming year.