Create a small checklist of things to consider before the end of your accounting period. The checklist should consider matters that are time relevant to you company accounting date and also applicable to the tax year ending 5th April.
Matters Relevant to your Accounts Date:
- If you buy office equipment, plant/machinery, consider buying it before your accounts year end, to accelerate the tax reliefs. Even if what you want is not available until after the year end, you could still get relief one year earlier.
- Top up your pension payments, especially if you are trying to use the full allowances available and to utilise unused reliefs from prior years. In a limited company, pension payments get tax relief at 19%.
Matters Relevant to Tax Year Ending 5th April:
- Pension Top Ups for businesses chargeable to income tax would not get tax relief as the payments are already tax relieved. But if you are paying higher rate tax, you could get more relief.
- Gift Relief – giving money to charity can also help lower your tax bill. People who pay tax at 20% will not get any additional relief but if you are a higher rate tax payer, you get more tax back. Important – if you do not pay any tax, do not gift relive your donations, as you will end up paying tax.
- Consider putting money into tax free schemes such as ISA’s – You could put in up to £20,000 per year. All the growth, interest and dividends within such schemes are tax free.