MINIMISE THE TAX YOU PAY
With WPP’s Martin Sorrell reigniting the tax row started at the end of 2012 by saying that tax ‘a question of judgement’ when speaking to Radio 4’s Today programme, is it time for the rest of us to consider the tax we pay?
For many, 2012 has been a tough year with the adverse weather affecting some businesses while the summer games have had differing effects on business. With the Government struggling to balance the public expenditure against tax revenues there is always the prospect of further stealth taxes around the corner. So, this is a good time of year for a tax check up – are you satisfied you are paying the minimum tax necessary? With a top rate reduction imminent, but the curtailing of a number of well used reliefs, there really is no time like the present to take a step back and look at how you are managing your personal finances and your business, and consider how you might reduce your taxes and/or improve your financial and business strategies.
In this year end guide we consider some of the ways you might act now to help achieve a more secure future for you, your family and your business. Please contact us now to discuss your specific situation and the planning opportunities you could consider before the end of the tax year. Acting now could pay dividends in the future.
New tax provisions have been introduced that are designed to assist businesses and investors. This year there have been generous increases in the Enterprise Investment Scheme (EIS), research and development relief, and Entrepreneurs’ Relief, and the creation of the Seed EIS scheme for investors in brand new businesses. New enterprise zones are being created, the main rate of corporation tax has been reduced and a special national insurance holiday scheme for new businesses remains in place in many areas within the UK.
Against this, over the last few years there has been a reduction in capital allowances, increases in national insurance, a new high rate of capital gains tax, further increases in the company car and fuel benefit charges, and the abolition of some capital allowances for buildings.
The reduction of the top rate of income tax from 50% to 45% on 6 April 2013 presents a clear incentive to defer income, while the continued above inflation rises in the basic personal allowance have the effect of widening the band
of income above £100,000 which is taxed at 60% due to the tax allowance being withdrawn.
With so many changes afoot, taxpayers should be particularly careful to make sure they appreciate the impact any present and future changes might have on them.
The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future.
This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. The value of investments can fall as well as rise and you may not get back the full amount you originally invested.
Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. Errors & Omissions Excepted.