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End of year tax planning

The tax year starts on 6 April and ends on 5 April, a deadline that looms large for businesses. And while most companies are familiar with business planning for the coming year, end of year tax planning is equally important. To help you save on your tax bill efficiently and legitimately, we’ve put together some end of year tax tips.

  • Utilise tax breaks

There are several tax breaks that businesses can use to reduce their end of year tax bill. If your business is involved in extensive research and development, for example, you can complete an R&D tax form, which may provide relief for some of your expenditure. Some small businesses, as well as those in the hospitality sector, can claim business rates relief, while those who have invested in plant and machinery can claim capital allowances. Speaking to a professional tax accountant can help you take advantage of the tax breaks that are available to you.

  • Defer income and accelerate deductions

If you’re expecting a large income towards the end of the tax year, you may be able to defer it entirely or in part until the next tax year. Equally, if you have expenses that can be deducted in the current tax year, consider paying them before 5 April in order to reduce your taxable income.

  • Review pension contributions

If you are self-employed or a business owner, you can claim a tax deduction for pension contributions. Again, chatting to a qualified accountant will help you review your options and ensure you benefit from the available allowances.

  • Utilise dividend allowances

Ensure directors of limited companies utilise their full dividend allowance for the current tax year. For 2023/24, the allowance is £1,000; it will fall to £500 for the 2024/25 tax year. The allowance cannot be carried over to the following year, so ensure it is maximised.

  • Make use of Capital Gains Tax allowances

If you’re looking to sell a capital asset for profit, then it may be worth pushing this through by 5 April 2024. For the current tax year, the Capital Gains Tax (CGT) allowance is £6,000. This will drop to £3,000 as of 6 April 2024. As with dividends, the CGT allowance cannot be carried over, so it makes sense to dispose of assets sooner rather than later (where possible) to take advantage of the full allowance. This applies to cryptocurrency as well as material assets.

Help with year-end tax planning

As you can see, there are plenty of opportunities to minimise the amount of tax your business pays. If you’re looking for a ‘tax accountant near me to help with ensuring your business is as efficient as possible, we at Ibiss & Co can help. We’re an award-wining firm of chartered tax advisers and accountants, and will assist you with business planning, tax planning and more.

Don’t hesitate to take advantage of our expert services by contacting our Barking, Tooting or Walsall offices for advice.

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