Maximizing Tax Benefits in 2023 and Beyond
It’s not too late to make changes to your 2023 tax return and plan for 2024. Are you optimising tax allowances and preserving precious cash flow? Are your circumstances changing and is your tax adviser aware? With a new budget around the corner and a potential general election on the horizon it is important you have a good relationship and speak regularly with your advisor, keeping them informed of your personal circumstances and goals. Recent tax changes have challenged traditional tax saving techniques and you need to ensure you don’t waste money now, or in the future. There are still ways to optimise the system, but clients often forget to discuss the baby on the way, the child starting university or joining the business, or even future retirement plans.
Self assessment tax returns:
• Have you thought about reducing payments on account if profits are down or you have invested in equipment? HMRC are now charging 7.75% for late payments whilst repayments only receive base less 1%!
• Make sure you are ready for the basis period reform, if your current year end is not 31 March, it might be time to change and look into redeeming overlap profits.
• Utilise the marriage allowance if you have a spouse with an unused personal allowance, this can be back dated resulting in welcome refunds.
• Are your tax deductible expenses minimal, have you thought about the property or trading allowances?
• Dividend allowances are decreasing. Consider tapping into other savings allowances available.
• Are you protecting potential benefits such as High Income Child Benefit Charges or ensuring you receive statutory paternity and maternity allowances? Make sure you let your advisor know what is upcoming to access these important benefits from the government.
• Capital gains tax annual exempt amount has reduced. Disposals previously covered could now create a fairly significant tax bill. Is it time to make that disposal now?
• If you made a capital disposal have you considered your other income, can you reduce this to ensure you stay within the lower rates of capital gains?
Owner managed businesses, planning for change:
• Increased corporation tax rates, is being in an LTD still cost effective?
• Have salaries become more advantageous? Is an overdrawn Directors loan account a cheap way to hedge your bets?
• If you have more than one company, quarterly instalments could increase your cash flow burden under recent changes, don’t get caught out by costly penalties and interest payments
• Do you wish to bring your children into your business – perhaps it is time for a different share structure to assist with this.
• Diversifying your businesses, are you aware of tax implications and how losses can be relieved or not?
If any of the topics mentioned above might apply to you, please get in touch with Meg or one of her team members at Manningtons for a chat.