What did you do over the Christmas break this year? For some people it was chance to spend time with family and friends, for others it’s just another day, but according to the Financial Times, for 2,616 people, it was the day they chose to file their Tax Return. Apparently Boxing Day was also a rather more popular day for filing with 8,465 people submitting their Tax Returns on 26th December.
Whilst it’s to be applauded that these Returns were filed before the 31st January deadline, one can’t help but wonder how many of those who filed their Tax Returns over the festive period had their holiday ruined by an unexpected tax bill.
Clearly there’s no such thing as a good time to find out how much tax you need to pay, but the earlier in the tax year the bill is anticipated, the great the opportunity to do something about it, and that’s where our accountants and Independent Financial Advisers can help.
Being near the end of the tax year, March is the traditional time to consider making additional pension contributions and for using up ISA allowances. By estimating your tax bill before the end of the tax year, we can help to plan your pension contributions so that they have the optimum effect, whether this be to keep you within the basic rate tax band, keep your income below £100,000 to preserve the Income Tax personal allowance, or to keep you out of the 45% tax band.
Of course whilst March may be the optimum time for making pension contributions, factors such as timing and cashflow may mean that pension contributions before the end of the tax year aren’t practical. Whilst pension contributions can’t be carried back to reduce the prior year’s tax position, certain other tax efficient investments can, and whilst our tax advisers and Independent Financial Aviser’s are able to work independently to provide tax and investment advice, we spend much of our time working together to provide joined up solutions to our clients to make sure they pay no more tax than they need to.
Why not give us a call to find out how our joined up approach can help not only give you advanced notice of your tax bill, but also suggest a strategy to mitigate it? Then, if you were one of the people who filed their Tax Return over Christmas, perhaps this year you can watch the Queen’s speech safe in the knowledge that your Tax Return has been dealt with.