End of one year, start of the next – make this year count

You need to make sure you are doing what you can to retain as much of your income as possible, through careful tax planning and forward thinking. The new tax year started in April 2015, so take a few minutes to refresh your memory on the new tax rates, rules and opportunities that may benefit you and your business this year.

For businesses

Corporation tax

The corporation taxrate has dropped to 20% as of 1 April 2015. This makes it one of the lowest rates of corporation tax in the G20. For limited company owners there is no action as such but those dental and medical professionals who don’t use a limited company may want to consider it. This depends on profits and personal circumstances so get an Incorporation Review by a Chartered Accountant to give you the right advice.

Investment into capital equipment

The Annual Investment Allowance is still in force until December 2015, providing businesses with the opportunity for 100% tax relief on the purchase of capital equipment to the value of £500,000. This is likely to be reduced next year and this will be announced in the Autumn Statement 2015. It is expected to be more advantageous than the old £25,000 however, if capital purchase is on your agenda this year, maximise tax relief through careful timing.

For savers and investors

Savings

Tax on savings income has been reduced so that the first £5,000 interest earned is at zero percent tax, for some savers. This is being done to encourage people to make savings again and will help around one million people to earn a little bit more each year.

Read more: Tax breaks on savings income

ISA’s

The ISA allowance was increased significantly in 2014 to £15,000 so it’s only a small increase from April 15. However, utilising both yours and your spouses or civil partners ISA allowance where possible is good for tax planning. New rules now enable ISA allowances to be inherited on death for married couples and civil partners, meaning that ISA savings are not lost where couples often saved jointly. From April 2015 more flexibility has been introduced regarding Cash ISA’s so money can be invested and withdrawn and reinvested within the same tax year and it doesn’t count towards the annual subscription limit.

For tax payers

The personal allowance has increased this year to £10,600 and is due to increase again to £11,000 in 16-17. Married couples and civil partnerships are now able to transfer part of their personal allowance to their spouse or civil partner, which can save a potential £212 a year in tax. Every little helps!

For pension savers

New pension freedoms mean that pension funds can be drawn from age 55, which gives more options for those planning for their retirement. 25% of the pension fund can be withdrawn tax-free but the rest is subject to the usual rates of income tax. Tax planning is most effective when it is bespoke. Seek the help from a professional adviser who can assess your own perosnal situaiton and provide advice thereon. Call today. T: 020 7376 9333 E: info@lansdellrose.co.uk

Related Articles

– 3 things you need to know from the 2015 Budget – PENSIONS: HMRC guidance available on new pensions – TAX: Summary of tax rates for 2015-2016