Tips for the Year End
13 January 2010

Planning for the end of the tax year is crucial if you want to minimise your tax exposure and make the most of the allowances and opportunities to you. Here is a selection of strategies that may help you and your business prepare ahead of 5th April. 

Reduce the impact of the 50% tax rate
From April 2010 a new top rate of income tax is being proposed - 50% for those earning in excess of £150,000. If you think that you might be affected by the change, consider accelerating income into the 2009/10 tax year by paying dividends / bonuses earlier to help mitigate its impact. Or if you are a self-employed business, why not change your accounting date to shift profits into 2009/10?

Maximise your ISA allowance
Make the most of your tax free Individual Savings Allowance (ISA) allowance. Remember, since 6 October 2009 those aged 50 and over can invest up to £10,200 (£5,100 in cash). All other adult savers can invest £7,200 (£3,600 in cash) for 2009/10. The higher allowance will be extended to all adult savers from 6 April 2010. 

Extract profit tax-efficiently
There are numerous ways of extracting profit from your company, but have you considered some of the alternative options that may be available? These might include the use of tax-free allowances such as mileage payments, and tax and national insurance-free childcare vouchers for parents of young children. Employer pension contributions can also be a tax-efficient means of extracting profit from your company. 

Please note that this is just a snapshot of the options that may be available to you, and you should seek our advice before acting on any of the above.