As your March year end is rapidly approaching, it is time to review and consider year end tax planning opportunities and developments in the business world.
Listed below are matters to consider in respect of your accounts, tax and business planning.
- Consider utilising your personal tax CGT annual exemption. The available amount for 2016/2017 is £11,100.
- Consider whether income producing assets should be transferred to a spouse with a lower tax rate.
- Consider whether any pension contributions should be made before the end of the tax year, particularly if you are a higher rate taxpayer. You have until 5 April 2017.
- Consider utilising any tax efficient investments, ISA’s, Enterprise Investment Scheme (EIS).
6 July 2017 - P11D filing deadline
19 July 2017 - Class 1A NI liability due
31 July 2017 - 2nd Payment on account – Income Tax
31 December 2017 - Accounts due at Companies House
1 January 2018 - Corporation Tax liability due
31 January 2018 - Personal Tax Return filing deadline and Income Tax Liability due
31 March 2018 - Corporation Tax Return filing deadline
1.Consider whether you wish to vote any dividends or year end bonus payments. Note that bonus payments can be accrued in your accounts, and provided they are paid within 9 months of the year end, they will be deductible for tax purposes.
2.Everyone receives a £5000 tax free dividend allowance in 2016/2017. Accordingly if you don’t normally vote dividends you should consider using this.
3.Review spending for any entertaining and foreign customers. The VAT may be reclaimable. You can go back three years if claims can be made.
4. Review your stock and WIP. Ensure this is valued at the year end. Consider also whether you should consider making any provisions for slow moving or obsolete stock.
5. Ensure any purchases of consumables are made prior to the year end to ensure tax relief is obtained in the March 2017 accounts.
6. Consider any asset purchases. Capital allowances legislation means that from 1 Jan 2016, the total allowable annual spend of £200,000 qualifies for 100% tax relief.
7. Consider any provisions needed. E.g. dilapidations for leased premises.
1. Trivial gifts. You can now award staff as many gifts up to £50 as you like. For directors this is capped at 6 x £50 (£300 p.a.) See http://www.cubepartners.com/wp-content/uploads/2016/12/Trivial-Gifts-update-paper.pdf
2. Ensure you have plans in place for auto enrolment and you know your staging date.
3. There have been a number of changes to employment legislation in recent years. Ensure employment contracts and handbook policies are up to date. Ensure the national minimum wage requirements are being met for all staff members.
4. Consider whether you are operating under the optimum VAT scheme. Cash accounting or the Flat Rate scheme can provide either cash flow or actual savings. The flat rate scheme is ideal for those working from home with minimal overheads. Cash accounting is ideal for businesses with turnover of under £1.35 million, where debtors days exceed creditor days.
5. In these days of IT dependency, ensure you have adequate IT back up in the event of a disaster such as a fire, flood or theft.
6. A staff party is a tax free benefit as long as the cost per head (including non-employees) is no more than £150, and it is available to all members of staff. This is an annual tax allowance, and a ‘use it or lose it’ allowance.
7. Consider whether you should take out HMRC Investigation Insurance. This covers professional fee’s in the event of a PAYE, taxation or VAT enquiry. Contact Kerry Grimes (firstname.lastname@example.org) for more details.
8. Consider paying interest on credit DLA balances from 2016/2017, everybody qualifies for a £500 or £1,000 allowance
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