Happy New Tax Year
What should you look forward to this year?
Welcome to the new tax year. This is a great time to plan for the year ahead to ensure you fully benefit from the changes in tax rates and allowances most relevant to you, and get the most out of your income. We highlight the main changes we feel will be of most interest, that come into effect from 6 April 2019 for the 2019/20 tax year below:
The tax-free personal allowance has increased to £12,500. This means that a UK resident individual with taxable income of less than £100k will benefit from more tax-free income this year. In addition, the basic-rate band has increased to £37,500, meaning the higher-rate threshold effectively increases to £50,000, which is a nice easy number to remember. The good news is that it means that you should benefit from having more net income.
If you are an owner managed business and you want to know more about how best to structure your remuneration to maximise your net income, sign up to attend our interactive workshop about how these changes will benefit you, and find out all you need to know about planning your profit extraction.
Capital Gains Tax
The capital gains tax free annual allowance has increased to £12,000 per individual, which applies to the gain on the sale of assets, including property and shares, so it is worth utilising if you wish to sell or transfer shares. Do seek advice.
The lifetime pension allowance increased from £1.03 million to £1.055 million. Pension planning can be a great tax saving opportunity, particularly if your income starts to exceed £100k, so although the pension allowance limit may feel far off, it’s a great prompt to think about your pension anyway. It’s always a good time to review your pension plans to ensure you have enough income in retirement.
The VAT-registration threshold remains at £85,000 until April 2022 but the new Making Tax Digital rules have kicked in already so make sure you are well informed and ready if this affects you. If you’d like to find out more, please read our MTD page and see how we can help you.
With changes in the tax system always evolving, our up-to-date experience will ensure your tax liabilities are planned to be at a minimum and your net income to a maximum. For more information, read our detailed tax rates and allowances resource page where you’ll also find plenty of information to keep you informed and up to date.
Don’t forget, we’re running a workshop for owner managed companies on ‘How to Pay Yourself Effectively’ so head over to our events page if you would like to book on.
FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.