8 January 2020
New Year’s resolutions to save tax and maximise your pensions contributions allowance!
It's that time of the year again when we are all working on our New Year's resolutions.. but what are yours? Saving money on tax payments should be on everybody's list this year! Read our latest article to find out how you can do this...
How to save tax?
Now is a good time to start planning your tax affairs before the end of the tax year arrives on 5th April 2020. An obvious tax planning point would be to maximise your ISA allowances for the 2019/20 tax year (currently £20,000 each).
You might also want to consider increasing your pension savings before 5th April 2020 as the unused annual pension allowance is lost after three years.
For those looking to do some inheritance tax planning, now would be a good time to review (or make) your Will.
For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer.
Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current tax year, but then lapses if unused. Hence the unused pension allowance for 2016/17 will lapse on 5th April 2020 if unused. Note that under the current rules the net after tax cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000.
Questions? We can help!
Get in touch with us, let us help you! Our team of tax experts can offer business advice and help you maximise your tax efficiency. Contact our Director, Nick Bonnello, today on 0115 964 8860 or email him at firstname.lastname@example.org toutilise your free, 30 minute consultation and find out how we can help you across all areas of your business.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.