As you are aware, the tax year ends on 5 April 2023. This is an excellent time to consider your tax position for the year and whether you need to do anything before the end of the tax year from a tax planning point of view.

You might like to consider the following:

Covid 19 Tax and National Insurance Rate Increases

With effect from 6 April 2023, the tax rates on dividends will remain the same at the following:

Basic rate taxpayers 8.75%

Higher rate taxpayers 33.75%

Additional rate taxpayers 39.35%

The tax-free amount will reduce to £1,000 (previously £2,000) in 2023/24. 

Making the most of tax-free savings

Have you used up your annual Individual Savings Account (ISA) allowance?

Have you made any personal pension contributions?

Transferring income-generating assets to a spouse with a low income

Tax-efficient investments

Consider investments into Enterprise investment schemes, Venture capital trusts etc., to obtain tax relief this year.

Make Charitable donations under gift aid to reduce higher-rate tax liabilities.

Use your annual Capital Gains Tax (CGT) allowance.

If you’re considering disposing of investments, consider making the disposal before 5 April. For the 2023/24 tax year, the annual allowance reduces to £6,000 (currently £12,300) and reduces further in 2024/25 to £3,000.

Capital Gains Tax Reporting

As a reminder, if you have CGT payable on the disposal of residential property, you will have just 60 days from completion to submit a provisional calculation of the gain and pay the estimated CGT due.  The gain must still be reported on your annual Self-Assessment Tax Return.  

If you have an unincorporated business

Buy assets before the business year-end to get tax relief a year earlier. 

If you have limited company

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim the following:

• a 130% super-deduction capital allowance on qualifying plant and machinery investments
• a 50% first-year allowance for qualifying special rate assets

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 invested.

If you are thinking of changing your vehicle, perhaps think electric

Certain tax advantages could be available if you purchase an electric vehicle for business purposes.  For companies, the benefit in kind value is likely to be low. For businesses in general, a deduction from profits for the cost of the electric vehicle could be available. 

Estimating your tax liability

There is a helpful tool here for estimating your 2023 tax liability https://www.gov.uk/estimate-income-tax. It’s good to put aside your tax!

Please get in touch if you’d like to discuss any of the above.