16 Mar The tax year end is approaching – could you save more tax?
The 2017/2018 tax year is coming to an end. It’s that time of year that seems to creep up on many small business owners, no matter how good your intentions were to be prepared.
Now is the time to make sure you have taken advantage of tax saving opportunities and invested where possible. It’s also time to start preparing for your year end self assessment.
What does this mean to you?
Utilise your ISA allowance
If you have not yet invested your full allowance into your Individual Savings Account (ISA) for this tax year, you might consider making use of this now as you will not be able to carry it over into next year. For 2017/2018, the total tax free savings allowance has increased to £20,000 (from £15,240 in 2016/2017).
You can invest it all or split it across different types of ISA depending on what type of investment you are looking for. Options include
- Cash ISA
- Stocks and Shares ISA
- Innovative Finance ISA
- The relatively new Lifetime ISA with an annual allowance of £4,000
With interest rates still low, you may wonder if saving is the right path for you, but tax free investments will give you a higher rate of return than a typical savings account.
Top up your pension
You should manage your pension contributions depending on income and desired pension pot at your time of retirement. Topping up your pension can help manage some of your tax liabilities so now is a good time to calculate how much to put in.
Higher earners should remember the lifetime pension allowance rules. The tax free allowance, currently at £1 million is set to increase in line with inflation during the 2018/2019 tax year to allow additional savings.
Get ready for year end
You may be an organised filer of receipts, invoices and expenses, or you may have a mad dash to find the relevant information on deadline day. We recommend that you start preparing your records early and gathering all your paperwork ready for your accountant.
Managing your finances throughout the year will mean you shouldn’t be fined for missing deadlines and you should have all your information in order to help with efficient tax planning.
If you need a little help managing your finances to make the most of your allowances, AJN helps many small businesses with their tax planning. Contact us for pre-year end tax advice.
AJN Accountants are specialists in helping contractors, freelancers and small businesses to save tax and time.
Please contact us for more information:
T: 020 3866 8951
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