April 6th 2019
The world of finance and tax is ever changing, get this new tax year off to the best start with our top tips.
Somehow May is upon us, and as of the 6th of April 2019, we are into yet another new tax year. For some business owners, that might result in a little sigh of relief… yet there are a number of simple things you can put in place to make your next tax returns much less stressful.
1. Understand Your Tax Allowances Now
Understanding your allowances can really take the stress out of worrying what you will be charged come the end of the tax year. The Personal Allowance (that’s the amount you can earn before paying Income Tax) increased on the 6th of April 2019 to £12,500. This means there is a small reduction in tax (£130 to be exact) a year for most self-employed or small business owners. Therefore as a company Director or Shareholder, to be as tax efficient as possible in the 2019-20 tax year, your company should pay you a salary of £8,632, along with dividends up to a maximum of £41,368. Based on this assumption, your total personal tax bill would be £2,662.50.
It’s also worth noting that the threshold for paying the Higher Rate of income tax has also increased to £50,000 (from £46,350) this year.
2. Plan Ahead
Many of us have had that feeling of scrambling around looking for invoices and receipts to submit at the end of the tax year, but with the technology available to us these days, this really can be a thinkg of the past. There are numerous tools out there enabling you to keep your receipts, invoices and other financial information online. This way, you can submit your returns with the click of a button, rather than taking a week off work to sort those papers out!
3. Plan Even Further Ahead
None of us like to think about getting too old, but considering your personal pension now can be of great benefit to your family in the future. The tax-free amount small business owners can pay into a personal pension stands at £40,000 per tax year. This really cnd add up to a substantial amount of money, with the lifetime allowance for pension savings now at a whopping £1,055,000 from the 6th of April 2019.
4. Let Us Take The Stress Away For You
Now we couldn’t finish this article without a shameless plug now could we… but there’s no hiding from the fact that Tax returns can be a huge cause of stress from many business owners. Employing an accountant to take care of your finances can remove this burden, ensure you are making the most tax-efficient decisions to benefit both yourself and your business, and most importantly give you more time to run your business.
For more information on how we can help you and your business, please give the friendly Marele Accountancy team a call on 01202 313674, or email us at .