Planning Ahead for Income Tax
With the January tax return rush over, now is a great time to start reviewing your remuneration strategy for 2018/19 and to start planning for the coming tax year.
With a couple of months left of the 2018/19 tax year, there is still time adjust income levels to ensure that you make the most of your tax-free amounts in respect of savings income and dividend income, as well as maximising the use of your basic-rate band.
In addition to income levels, you should also be considering contributions to pension schemes, both corporate contributions and personal ones. The rules governing pension contributions are complex, but the starting point is that all individuals can make, or have made on their behalf, contributions of up to £40,000 per annum and still receive tax relief, although this is tapered where the individual’s combined income and employer’s pension contributions exceed £150,000.
With the ability to carry forward unused allowances for 3 years, this is certainly a valuable planning tool, especially for those coming up to retirement age.
With 2018/19 planning completed, this can provide you with an ideal platform from which to plan your 2019/20 income levels and pension contributions, and allows you the maximum amount of time in which to achieve those plans.
For more information on planning opportunities, please speak to a member of the Barnes Roffe team.
Blog written by Nick Bartlett
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