Now that the tax year end is on the horizon, it’s a good opportunity to review your business finances and explore tax planning options before 5 April.  You may want to think about the allowances and reliefs available to you and your business, as tax planning can help you to boost your cash flow, reduce tax liabilities and put your business in a stronger financial position for the new tax year.

Here’s an overview of the areas you may want to consider:

Savings

• You may want to add money to maximise your ISA allowance for the 2024/25 tax year (currently £20,000 per person)
• If you are between 18 – 40, you can open a Lifetime ISA and pay in up to £4,000 each year.  The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year (the £4,000 limit is part of the overall £20,000 ISA allowance mentioned above)

Pension planning

• You might also want to consider increasing your pension savings before 5 April 2025.  Under the current rules, the government adds to your pension contributions at the 20% basic rate, with additional relief for higher rate taxpayers

Capital allowances

• If your business invests in equipment, vehicles, or machinery, you may be eligible for tax relief under the Annual Investment Allowance.  Reviewing these purchases before the tax year end can help make sure that you don’t miss out on a valuable deduction

CGT

• You might wish to consider bringing forward capital gains to before 6 April 2025 if you haven’t used your £3,000 CGT annual exemption for 2024/25 

R&D

• If your company is involved in innovation, you may be eligible for the Research and Development Tax Relief scheme.  Use this year end planning period to ensure you are exploring all of the tax relief opportunities available

Voluntary National Insurance Contributions (NICs)

• As explained in a previous article, the deadline is approaching for you to take advantage of the extended period to plug any gaps in your National Insurance record and boost your state pension pot.  After 5 April, any future payments made to NI records will revert back to the six year rule

If you would like to speak to us about any of these tax planning tips, please get in touch.