Making Plans Will Save You Money
By planning in relation to personal tax or company taxes, it allows you to potentially save money. You can minimise the tax effect of what you are doing, potentially. Maximising reliefs and credits available.
Tax planning for your business might include retirement planning (passing the business to the next generation or getting the business ready for sale), or annually; bonus accruals or company pension top ups prior to year-end.
Getting your business ready for sale can take some time. Preparing early to ensure you have it ready financially and then making sure you qualify for the tax reliefs available in this area is important (as there are some very low rates available if conditions are satisfied).
Personal planning might include gifting property, downsizing, pensions etc. Reviewing your allowances to different class of relative (some thresholds are very low, and the tax can be a large burden) and ensuring you have a plan in place for the future.
Tax planning is closely linked to financial planning. You’ll often notice articles from me on planning our financial goals and focusing on what we do with our finances. As we think ahead to what we want to happen in our business or with our personal financial affairs, it’s important to talk through these issues to ensure taxes are reviewed also.
I firmly believe financial planning and your goals always come first and the tax implications is only then considered. There is no point in knowing about great reliefs and trying to make them fit your plan, if ultimately, they don’t achieve what you want to achieve.
Therefore, always consider what you want to happen first. Then sit with your financial or tax advisor in relation to the tax effect of these and if done well in advance, any tax planning can then be looked at.
If you haven’t thought to prepare your tax return yet for 2018, get ahead with this work now. Knowing any liabilities now or in advance, will allow time for planning and cashflow allocation (potential pension top up etc). Getting funds into your bank account in a tax efficient manner. The deadline is mid-November (Nov 12th for online filers), however, I’d always recommend having this done well in advance of November.
Have a great week
Wendy[22 July 2019]