The tax year end is also rapidly approaching, what do you need to do to make sure you’re prepared?
The new tax year is looking to be a bit of a beast with the new tax rates incoming. Very helpfully we still don’t know for certain what is coming in April. Which is really ace with a month to go.
But what can you do to be prepared? There is some action we can take on what we currently know might happen.
1 – Pensions. Are you set up contributing to a pension? Are you making the most of the tax relief pensions offer? I can’t advise too much on pensions as they are regulated. But I can say, you really should be paying into a pension. And I know a few people you can speak to about pensions if you need an introduction. (I don’t get anything from this, it’s just good tax wise and good for future you.)
2 – The Capital Gains allowance is being slashed from £12,300 this year to £6,000 next year. So if you have things to sell that will generate a gain, now might be the time to max out that £12,300.
3 – Your dividend allowance is also being slashed from £2,000 this year to £1,000 next year. If you pay yourself minimal dividends, make sure you take the £2,000 before April to make the most of this allowance.
4 – Corporation tax is increasing from April. This is the most annoying increase as a month out we still don’t have the details on exactly how this will be done. So we can’t tell you much other than if your limited company profits are over £250,000 you will be paying 25% corp tax. If your profits are under £50,000 corp tax remains at 19%. Between those two amounts, it’s anyone’s guess currently.
Making big purchases? It might be worth delaying until after April when you could be paying higher corp tax rates.
5 – Minimum wage will be going up from April, for over 22s it will be £10.18 per hour.
6 – Remember to be maxing out ISA limits before 5th April if you can, I know this one is a nice dream for most of us at the moment!
If you’re a limited company director and want an idea of what your tax bill will look like from April with the rules as they currently stand we can carry out reviews for you at £100+VAT. This will help you plan ahead and make sure you’re saving enough tax, within this we’ll also review how you’re paying yourself to make sure you’re keeping tax efficient amongst all the changes.
Use of Home Expenses – Telephone and Internet
A question we get asked regularly is around what businesses can claim for phone and internet expenses. As always the rules differ for sole traders