It’s that time of year again, so if you haven’t taken steps to start planning for the 2018/19 tax year, it’s time to get the wheels in motion. A number of substantial changes to tax reliefs and thresholds are set to come into force on 6th April 2018, and these are likely to affect a wide range of businesses and individuals. In light of this, it’s important that you get up to speed with these changes and also get maximum benefit from the current rules before the new ones come into force. For example, if you have not used up your pension contribution of £40K for the year yet, then you should do so before the 05 April 2018 as a tax planning and saving measure.
Here are some of the key changes:
*The tax-free dividend allowance will be falling from £5,000 to £2,000 on 6th April, which means people with dividend income will be met with much greater tax increases. This means basic rate taxpayers will see an increase of £225, higher rate payers will be met with a £975 rise and additional rate payers will face a £1,143 increase.
*The national living wage is rising to £7.83, with the fuel duty rise having again being cancelled.
*The VAT registration threshold is to remain at £85,000 for two years from the 1st April, with the benefit in kind diesel supplement to move from 3% to 4%.
*EIS investment limits are doubling to £2 million from the start of the tax year.
*The residence nil-rate band (known by some as the ‘family home allowance’) is to rise to £125,000 from £100,000, whilst the annual capital gains tax allowance will increase by £400 to £11,700.
*The trustee exemption threshold will rise to £5,850 from £5,650.
*The personal income tax is rising to £11,850 from £11,500, with the higher rate threshold leaping from £45,351.
How we can help
At Morgan Reach, we can come to your assistance if you need any help with year-end tax planning. Our services are designed to help you maximise wealth through a series of channels including restructuring your business, making tax-efficient savings and identifying the most lucrative investments, whilst ensuring you remain entirely compliant with tax law.
There are many things you can do to reduce the tax burden in 2018, including making full use of your ISA allowances, opening a LISA to gain a credit from the Government worth 25% of your investment and using junior ISAs.
You can also make a series of pension contributions to make your future more secure, and if you haven’t used up all your allowances during recent years, you could invest up to £160,000 before the tax year comes to a close. Income-splitting can also help you reduce your tax obligations if your husband, wife or civil partner earns more or less than you. We can also provide you with advice on inheritance tax, property tax issues, R&D tax, EIS, tax returns, tax investigations, CIS tax, business planning, tax reliefs, exit planning and many more other issues related to tax and financial planning.
Get in touch
Morgan Reach is a market-leading tax and finance specialist with vast expertise in helping you make your money go further. We have an in-depth understanding of UK and overseas tax and know the latest tax regulations inside out. Our services are designed to make an invaluable difference to you and your business.
We offer a comprehensive range of services to meet all tax planning needs, so contact us today to find out more about how we can help you meet your tax planning obligations without paying any more than you need to.
Get in touch today with our Certified Chartered Accountants by sending an e-mail to firstname.lastname@example.org, giving us a call on 0333 300 1887 or completing the contact us form on our website.
DISCLAIMER: This article is for guidance only, and professional advice should be obtained before acting on any information contained herein. Morgan Reach Chartered Certified Accountants cannot accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the content of this article.