That’s right, the tax year-end approaches! NOW is the time to start planning and thinking about how you can reduce profits and consequently your tax liability for the coming year - 2022-23.
We’re here to help every step of the way!
Here are some key planning points to consider and other options to explore…
Pension contributions…
If you are a director of a limited company, consider paying an additional pension contribution before your company year end.
Repairs and maintenance…
You may want to bring forward some planned expenditure, to before your year end.
Staff bonus…
If you normally pay a staff bonus, look to do this before the business year end.
Plant and machinery…
Again, buy any large pieces of plant and machinery before your year end and sell any machinery in the new tax year to maximise the tax efficiency. If you have a legal agreement to buy the equipment before the year end and it is delivered and paid for within three months after your year end, the expenditure can be included in the current year. See below for Super Deduction.
Advertising and marketing…
Investing in advertising and marketing before your year-end allows you to then use the material for the remainder of the year.
Limited Companies
Dividend tax free allowances are changing - down from £2,000 to £1,000.
So, if you haven’t drawn a dividend in the tax year 2022-23, you might want to consider doing so up to £2,000.
Company Tax Rate from 6 April 2023 increases from 19% to 25% for companies with profits over £250,000. If your company profits are below £50,000, the rate stays at 19%.
For profits between £50,000 and £250,000, the tax rate will be on a sliding scale between 19%-25%.
Capital Allowances Super Deduction ends on 31 March 2023. This allows companies to claim 130% of the value of NEW plant and machinery against their profits.
General
Capital Gains Tax
The annual exemption reduces from £12,300 to £6,000 – So, if you are selling a capital asset, you may want to consider doing this before 5 April.
Also, if you have a share portfolio, speak to your advisor about selling some shares and re-investing the proceeds to crystalise some gains before the 5th of April.
The Autumn Statement
Here’s a quick overview of the headlines from the Autumn statement:
UK Chancellor Jeremy Hunt outlined three main priorities to tackle the cost-of-living crisis and rebuild our economy:
Stability
Growth
Public Services
He concluded his statement by saying that “it is a balanced plan for stability, a plan for growth and a plan for public services. It shows that you don’t need to choose either a strong economy or good public services…”
You can read the full budget using the button below!
April might seem a long way off yet, but we urge you to start thinking and planning now so you can get the best out of your year-end for you and your business.
Please get in touch if you want to explore any of these options and our dedicated team will be happy to help!
Want to talk year-end?
If you would like to ask us any questions please contact either Leanne Pearson or Kris Clayton on 01663 743800 or email leanne@claytoncca.co.uk or kris@claytoncca.co.uk
Why we are different
We are accountants but business people too, so our advice is based on practical and professional experience.
If you found this useful and are not currently a client of Clayton CCA, we’d be delighted to discuss your accounting needs. Take a look at our fixed fee structure and also what we do that is different…