What Does A Pizza And Tax Planning Have In Common?
The end of the tax year is fast approaching ...
POSTED BY ROGER EDDOWES ON 26/03/2018 @ 8:00AM
Ok, I'm going to put you out of your misery: the last day of the tax year coincides with Deep Dish Pizza Day (5th April)! Many of you will turn your thoughts to what sauce and topping you are going to use ...
Deep Dish Pizza Day coincides with the end of the financial year. Pizza and tax planning anyone?
copyright: fozrocket / 123rf stock photo (licensee)
But for many others, I would suggest that a few simple tax planning techniques could regularly fund a pizza delivery person to come to your front door with a scrummy round meal in a square box.
"Would you like potato wedges and
dips with that?"
I know that you are probably being bombarded by tax advisors and financial advisors all wanting to share their great end of year tax tips with you, but in case you have missed out here are a few of the more sensible ones.
If you have any spare cash consider topping up your ISA accounts. For 2017/18 the allowances are as follows, and remember you can't carry unused allowances forward:
- Individual Savings Account (ISA) subscription limit - £20,000
- Junior ISA subscription limit - £4,128
- Child Trust Fund (CTF) subscription limit - £4,128
Alternatively, top up your retirement fund; there are still generous tax reliefs available for contributions to personal pension plans. Depending on your earnings, you may currently invest up to £40,000 each tax year.
For those who are shareholders of their own companies:
If there is scope to declare dividends, ensure that as an investor, you are receiving up to £5,000 of dividends in total as these won't be taxed. This allowance cannot be carried forward to the next year and next year's allowance will only be £2,000.
Consider deferring other dividends to next year to effectively postpone the tax charge 12 months, however, do ensure your income exceeds the current personal allowance as you don't want to waste it.
For those who are employed:
Consider making further pension contributions.
Consider making gift aid contributions.
For higher rate taxpayers you will get further savings in tax as the contributions will have the effect of increasing your basic rate tax bracket. If you are earning between £100,000 and £123,000 it will also save you losing part of your personal allowance - that then gives a total tax relief of 60%.
For those considering the sale of investments:
The current capital gains tax annual exemption amount for an individual is £11,300 (increasing to £11,700 next tax year), so consider staging your disposals to maximise the use of the annual exemptions.
Have you considered selling shares and reinvesting them in ISA's to get them into a tax-free environment?
And now you have consumed all those calories, thank goodness 6th April is Walk to Work Day! You can eat any left-over pizza for breakfast as you walk along.
"Would you like to know more?"
If you'd like to talk about pizza and tax planning then do get in touch with me on 01908 774320 or click here to ping me an email and let's see how I can help you get that pizza delivery person to your door.
Until next time ...
If you're looking to work with a leading firm of accountants, then why not visit our website which you can find at www.essendonaccounts.co.uk and let's see how we can help you!
More about Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves ‘getting his hands dirty’, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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