The new tax year starts 6 April 2023, so you do have a little bit of time left to consider your options for any final tax planning in the current financial year, and to begin to plan for 2023/24.

With the Spring Budget looming, it’s easy to be tempted to delay tax planning in hopes of favourable tax cuts.

However, the Chancellor has made it clear that significant cuts to taxation are not likely to be in his speech, and so businesses and individuals should be taking steps now to prepare for the changes that we already know are being introduced in the months ahead.

Whether in respect of your personal or business affairs, tax planning doesn’t have to be a headache.

With the right support, you can take advantage of certain deductions, credits and other tax reliefs to reduce the amount of tax that you owe.

Personal tax planning

Whether you’re a sole trader, a company director, an investor, or a high-income earner, careful tax planning can help you to keep more of what you’ve worked hard for.

There are a plethora of rules and allowances that exist, but with the know-how to navigate and apply them correctly, there is huge opportunity to mitigate your tax liabilities.

The following scenarios may give rise to a need for tax planning, amongst others:

  • A change in your personal status – i.e., single, married, separating, joining or dissolving a civil partnership;
  • Disposal of a capital assets, such as shares or a property, particularly when you consider that the Capital Gains Tax annual exempt amount will fall from £12,300 to £6,000 from 6 April 2023;
  • Your income is likely to exceed £50,000, leaving you liable to pay the High Income Child Benefit Charge;
  • Your annual income is approaching, or has exceeded £100,000;
  • You have unused annual pensions allowance for 2022/23;
  • You are self-employed with a 31 March 2023 year-end;
  • You are self-employed and are considering the purchase of equipment or vehicles for your business; or
  • You are the director and/or shareholder of a limited company and have not yet considered how you’ll extract profits for 2022/23.

Business tax planning

As for tax changes affecting your business, changes to Corporation Tax will see the main rate increase from 19% to 26%, with a marginal rate of 26.5% charged on profits between £50,000 and £250,000.

The 130% super-deduction allowance is also being withdrawn, and there will be changes to R&D tax relief.

These changes may call for a review of your existing plans, to determine whether you may benefit from bringing forward expenses, or deferring income.

Capital allowances and other investment incentivising initiatives can enable you to offset certain expenditure against profits, to lower your tax bill.

When it comes to your business, your tax planning should form part of your wider business plan and strategy, to really help you make the most of your money and investments within your company.

Tax compliance and planning support

We support hundreds of businesses and private clients with their tax planning every year and help many to mitigate their liabilities where they didn’t previously realise that they could.

We specialise in helping clients with the full range of taxes including PAYE, NIC, VAT, Corporation Tax, Capital Gains Tax, Income Tax and Inheritance Tax.

To learn more about how we could help you to get your business and personal tax affairs in order, please get in touch with us.

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