Two glasses of Champagne and streamers

Happy New (Tax) Year!

The new tax year brings with it new opportunities to save tax.

ISAs: avoid the last minute rush. This year the allowance is £11,880 (rising to £15,000 in July, of which all can be in cash). Don’t forget that’s each, so married couples can invest double. And the junior allowance is £3,840 (rising to £4,000 in July). ISAs could save you tax when compared to other investments or savings accounts.

Pensions: the earlier the better – get those savings working for your retirement. With the proposed relaxation of rules mooted in the recent budget, pensions are looking more attractive. Contributions you make attract tax relief, effectively redirecting money away from HMRC and towards your future. Everyone can make pension contributions of £3,600 regardless of earnings.

Contact MyTax for all your tax planning needs.

Money box with key labelled Pension Fund

Maximise your Pension contributions before 5th April

Making pension contributions before the end of this tax year can help mitigate your tax liability. Such contributions attract tax relief at your highest marginal rate, be that 20%, 40% or 50%.

This form of tax planning has become even more appealing with the announcement in this weeks budget of plans to make it easier to take benefits in retirement. It may no longer be necessary to purchase an annuity, or suffer punitive tax for income drawdown.

Take advantage of the pension carry forward rules in order to benefit from any unused allowances from the previous three tax years. This is generally the difference between the annual contribution limit (currently £50,000) and the pension input each year and can be added to your relief for 2013/14. Note that the annual pension allowance reduces to £40,000 from 6 April 2014.

Contact us if you require guidance on end of tax year planning.