Think Tax – and use all the available allowances to keep your bill down

14:57 13 February 2014

Mary Plant.

Mary Plant.

Archant

Spring is a time when we typically see a flurry of tax-advice activity.

With the end of the tax year on the horizon, it seems a good time to look at how you can keep your tax bill as low as possible.

Tax is the lifeblood of any state infrastructure and we should, of course, all pay what is due.

However, our tax system is designed to provide each of us with a range of allowances and exemptions and through careful planning, your tax liability can be reduced.

Each individual has a personal income allowance which, for the 2013/14 tax year which ends on 5 April 2014, stands at £9,440 (£10,500 for those over 65).

If either you or your spouse earns less than the personal allowance, it may be worth looking at transferring income-producing investments and savings from you to your spouse or vice versa to minimise the tax due.

The same principle applies if one of you is a basic rate taxpayer and the other pays tax at one of the higher rates.

If you are looking to dispose of assets such as investments, you should also plan carefully to make the most of your Capital Gains Tax (CGT) exemption.

For 2013/14 this stands at £10,900, so any gains you make above this threshold will be liable to tax.

If you have already used up your CGT exemption, it may be worth deferring any future gains until the new tax year – but conversely if you are expecting to exceed the threshold in the new tax year, perhaps you might benefit from bringing forward disposals into the current year.

Business owners should ensure that they have taken advantage of the generous capital allowances available in the current tax year to minimise the tax due on profits.

The purchase of assets such as plant and machinery can attract capital allowances of 100 per cent - i.e. their cost can be written off against taxable profits.

If you have made substantial profits in the current year, it may be advisable to consider planning any imminent capital purchases to minimise your tax position.

• For help in planning your personal or business tax strategies, contact Mary Plant on 01945 582547 or e-mail mary.plant@wheelers-accountants.co.uk

Alternatively, follow Wheelers on Twitter at @WheelersAccount.

0 comments

More news stories

53 minutes ago
Danny Warby is on trial for causing death by dangerous driving. 
Picture: Terry Harris

A lorry driver from west Norfolk opened a text message seconds before he veered into oncoming traffic and caused a crash which killed a police officer, a court heard.

35 minutes ago
Dr Ubani.

Britain’s decision to leave the European Union will make patients safer by allowing the NHS to crack down on poor English skills among staff, the country’s top surgeon has said.

36 minutes ago
Dangerous driver flees after crashing into house in The Limes, Whittlesey

A driver fled the scene after crashing their car into a house in The Limes, Whittlesey.

Yesterday, 15:40
James Watson

A suspect in the murder of Rikki Neave has revealed his identity through a series of messages and photos posted on Facebook.

Most read stories

HOT JOBS

Show Job Lists

HOT JOBS

Show Job Lists

Digital Edition

Image
Read the Cambs Times e-edition E-edition

Newsletter Sign Up