Tax planning for professionals – our top tips

With over two months until the end of the financial year (ended 5 April 2018), there is still time to take action to reduce future income tax liabilities or take advantage of annual allowances. Take a look at our points to consider, ahead of the new financial year below:

• Have you maximised your annual pension contribution allowance? Individuals can pay in up to £40,000 gross each tax year, which can help reduce tax payable at higher rates and the child benefit tax charge. Pension contribution payments made by your firm will also be treated as a tax deductible expense within your accounts.

• Have you made full use of your ISA limit? This is £20,000 for the 2017/18 tax year and any future interest generated will be tax free.

• For those working within a Limited company structure, ensure that your tax free dividend allowance of £5,000 is utilised.

• The capital gains tax annual exemption in 2017/18 is £11,300 and should be used where possible. To ensure that both individual CGT allowances are utilised, consider making spousal transfers.

• Individuals earning between £100,000 and £123,000 could pay an effective rate of 60% as a result of a reduced personal allowance. Consider pension contributions, charitable donations and spousal asset transfers to reduce taxable income.

If you’d like more information or advice on any of the tax planning tips above then please contact our specialist professions team via professions@eqaccountants.co.uk