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Your 2018/19 year end planning checklist

Make use of the annual ISA allowance

Have you made the most of your ‘tax-free’ ISA allowance for 2018/19? There are several different types of ISA available, including Cash ISAs, Stocks and Shares ISAs, the Lifetime ISA, the Help to Buy ISA and the Innovative Finance ISA. The overall annual subscription limit is £20,000. Payments for the 2018/19 tax year must be made by 5 April 2019.

Utilise personal allowances  

Have you made use of the personal allowances available across your family? Individuals within the family are taxed separately, and each is entitled to their own allowances and exemptions. The basic personal allowance (PA) for 2018/19 is £11,850. Making full use of the allowances can help you and your family to benefit from more of your wealth. Contact us for advice.

Consider the Marriage Allowance

If you are married and one partner is a lower earner, have you taken advantage of the transferable Marriage Allowance? Up to £1,190 is available for 2018/19 to married couples and civil partners, where neither pays income tax at the higher or additional rate and one partner earns no more than £11,850. This can help couples to reduce their joint tax liability by up to £238.

Maximise your pension contributions

Have you maximised your contributions into a pension scheme? Tax relief is available on contributions up to the greater of £3,600 and the amount of relevant UK earnings, and subject to an annual allowance of £40,000. Contributions on any excess over this amount will generally be taxable. The allowance can also be tapered for individuals who have income over £110,000 and adjusted annual income over £150,000. Contributions must be paid on or before 5 April 2019 to be applied against 2018/19 income.

Review your remuneration strategy

Have you reviewed your remuneration strategy to establish the right balance between dividends and salary? The Dividend Allowance fell from £5,000 to £2,000 in April 2018. While there may still be potential benefits for a director-shareholder taking a dividend over a salary, the amount of tax saved has been reduced. You may also wish to look at other ways of extracting profit from your business, such as considering incorporation if your business is currently unincorporated, and making the most of tax-free allowances, such as mileage payments for business journeys.

For more information on a range of tax planning tips to consider before the year end, please contact us.