31 January 2015Tax returns – don’t leave it too late!
The deadline for filing your 2014 self assessment tax return online is 31 January 2015. Returns not filed by this date will result in a £100 penalty. Where the return has still not been submitted after three months, daily penalties of £10 will accrue, continuing for a maximum of 90 days. Further penalties will be payable for prolonged filing failures.
We can prepare and file your tax return on your behalf, as well as advise you on tax dates: which payments are due and when you should pay them. Contact us for details.
5 April 2015Plan now to save tax ahead of the year end
The tax year end is 5 April 2015 – but don’t wait until then to speak to us about saving tax!
The earlier we can discuss your personal and business arrangements with you, the more likely it is that we can implement sensible strategies to make sure you are legally compliant but also taking full advantages of the tax reliefs and allowances available, and not paying more tax than you need to. Here are just a few possible strategies to consider:
- Invest in a NISA
On 1 July this year ISAs were greatly simplified and relaunched, and all existing ISAs became New ISAs, or NISAs. Adults are now able to invest in any combination of cash or shares up to a total of £15,000. Savers aged between 16 and 18 can hold a cash NISA with up to £15,000 but cannot open a stocks and shares NISA. (In addition, Junior ISAs, for those aged under 18 who were not entitled to a Child Trust Fund account, allow investment of up to £4,000 in 2014/15.) You have until 5 April 2015 to maximise your 2014/15 tax-free NISA investment, but it’s worth shopping around online for the best deals, particularly with interest rates for many products currently being relatively low.
- Pay into your pension
In some cases personal contributions into pension schemes can attract relief of up to 60%, which makes them an ideal tax-free investment. Pension contributions need to be made by 5 April 2015 for them to be applied against 2014/15 income. Relief is available for tax on annual contributions, limited to the greater of £3,600 (gross) or the amount of the UK relevant earnings, but subject also to the annual allowance (currently £40,000).
- Should you defer income?
The top income tax rate is 45% and the equivalent dividend tax rate is now 37.5%, so it might be practical to consider delaying the payment of your dividends until after the year end if your taxable income is likely to exceed £150,000, especially if you anticipate that your income in 2015/16 will be less. Contact us for more guidance on this.
- Take advantage of capital allowances
For a temporary period from 1 or 6 April 2014 to 31 December 2015, the majority of businesses are able to claim a 100% Annual Investment Allowance (AIA) – in effect, a year one write off – on the first £500,000 of expenditure on most types of plant and machinery (but not cars). There are also some allowances available to encourage ‘green’ investment, for energy-saving equipment and low CO2 emissions cars. Typically, a purchase made just before the end of the current accounting year will mean the allowances will usually be available a year earlier than if the purchase was made just after the year end. In the same way, the disposal of an asset may trigger an earlier claim for relief or even an additional charge to tax.
- Transferring income
If your spouse or partner has little or no income, consider transferring income (or income-producing assets) to them to ensure that they are able to make full use of their personal allowances (£10,000 in 2014/15). However, care should be taken to avoid falling foul of the settlements legislation governing ‘income shifting’ and you need to consider the legal consequences of transfers. Children also have their own personal allowance, meaning that income of up to £9,440 escapes tax this year, providing it does not originate from parental gifts. Make sure you speak to us before acting.
These are just a few areas to consider and will not apply to everyone. We can help you to make the most of the tax-saving opportunities available to you ahead of the 5 April year end. Contact us for advice tailored to your circumstances
Phone: 0141 643 9200
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
Pension and investment advice will be given by our sister company, ad+ Financial, which is regulated by the FCA.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
The content of this article is for your general information and use only, and is not intended to address your particular requirements. The content should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of the content.