Tax Year End

The Tax Year End Checklist

Victoria Scally News

Happy (pre) tax year end! A date that might pass you by, but for us, it’s a great opportunity to make sure our clients have maximised their taxable allowances for the year.

In the lead up to the 5th April (the personal tax year end), there are some items that you should think about:

  • ISA Allowance

    Most people get at least £500 worth of interest a year tax-free. If you are likely to exceed this, consider putting your savings into an ISA. The tax-free limit is £20,000 per tax year at the time of writing.

  • Pensions Allowance

    You have until 5th April to make any additional pension contributions for 2019/20. There is an annual tax year ‘cap’ of £40,000 (in most cases). This can save you tax if you are a higher rate taxpayer. If you are a limited company, consider making ‘employers’ contributions directly from the company. This is will save corporation tax in the company.

  • Gift Aid

    If you have any charitable donations to make, be sure to make them before 5th April.
    If you are a higher rate taxpayer this can save tax.

  • Child Benefit

    If you or your partner are likely to exceed £50,000 income in this tax year (including bonuses and commissions) and are in receipt of child benefit, you could be subject to the High-Income Child Benefit Tax Charge. This means that effectively, you can end up repaying all of the child benefit you have claimed. If so, you should consider whether it is worth claiming at all.

  • Capital Gains

    If you are considering disposing of several capital items such as shares or investment properties, it is worth considering disposing of at least one before the end of the tax year. You have a taxable annual allowance that you can offset against your gains, so splitting disposals across tax years can be a smart way to be tax efficient.

  • Marriage Allowance

    You can ‘transfer’ some of your tax-free personal allowances to your other half or vice-versa. However, this does not apply if one of you is paying higher rate tax. If it does apply, you can save around £230+ a year in tax when used in the right way. Find out more and apply online here.

  • Dividends

    If you are a limited company owner, consider reviewing your dividends. As a taxpayer, you have £2000 of tax-free dividends available.

    You should also review the amount you have been paid and could pay, to ensure you are maximising the amount of dividend income you can have at the lower (‘basic rate’) of 7.5%. If you are currently earning under around £50,000 this is definitely worth reviewing.

  • Salary

    If you are a limited company owner, you should review your PAYE (Payroll) salary to make sure you have it set at the most efficient level.

    This is worth discussing with a professional, but a good amount in the 19/20 tax year, for most people with no other income, would be around £8600 per year.

  • Landlords

    If you are considering replacing items or repairing your property over the next few months, bringing forward to before the 5th April will get you the tax relief quicker.

If you have any questions on the above, please contact us and the team will be happy to help.