To ensure you don’t miss out on valuable allowances and exemptions that you are entitled to, you should plan and take advice now rather than leaving it until the end of the tax year, or the end of your financial year. Here are some suggestions for you to consider.
(1) The impact of bringing expenditure into this financial year, or deferring to the next, can have a significant impact on your tax position and financial results.
(2) Maximise and use of all allowances, credits and exemptions you are entitled to, for instance, capital allowances can represent a valuable tax deduction for your business. They can be claimed on a wide variety of capital assets including plant, machinery, equipment, fixtures & fittings and vehicles. Timing of expenditure should be considered carefully.
(3) If you are thinking about selling a business asset and a gain is likely to accrue – before you do, make sure you tax advantage the sale. For instance, tax due on an asset sale can be delayed by reinvesting the proceeds in another qualifying asset.
(4) Research & Development is another very valuable tax relief available to businesses involved in qualifying projects. Business involved in developing new products, processes or services or enhancing existing products may qualify for additional relief. Check out the position as you might be surprised what can qualify and how much it could be worth to you.
(5) Any dividends you currently take in excess of the £2,000 dividend allowance will attract an income tax liability. Any dividends above that threshold but still in the basic rate tax band will be charged at 7.5%. Those in the higher rate band will be charged at 32.5%, and those in the additional rate band at 38.1%. If you haven’t already considered changing the way in which you balance your income and dividend payments, please get in touch to discuss your options.
(6) Contributing to a pension is an opportunity to benefit from tax relief. Company pension contributions can also be useful.
(7) Although not specifically a tax planning issue, there are a range of private and public sector grants available to businesses at all stages: pre-start, start-up, early stage and those looking to scale up to achieve their full potential. If you are creating jobs, safeguarding jobs, developing new products, services or processes or undertaking R&D then it is worth a conversation with us to find out if your project will qualify for any grants or incentives.
(8) Making improvements to how you manage the business finances and record keeping can also improve profitability and cash flow. So make a resolution for the nex tax year especially if you will be using the Making Tax Digital system from 1 April 2019 to investigate a cloud accounting package. >Martin Aitken's cloud accounting packages