Strategic tax planning can help you identify opportunities to legally reduce your tax burden so you can keep more of your hard-earned money. Proactive planning can also help you stay compliant with tax regulations and avoid penalties.
However, it’s not as simple as it sounds. The process involves a long list of factors, including your investments, income sources, potential deductions, and expenses. That’s why experts recommend hiring a tax accountant in London who can help you confidently navigate the process. If you need assistance in this area, look no further than our chartered accountants here at Allenby Accountants.
The importance of tax planning
Planning your taxes allows you to make better financial decisions that support your long-term goals, contributing to your overall financial well-being. A tax accountant in London can offer the guidance you need to manage all aspects of your taxes effectively. With proper tax planning, you can confidently reach your financial goals, save for retirement, invest more money, pay for education, and do other things you love. Below are some tax planning tips your tax accountant in London may recommend depending on your case:
- Eliminate or reduce your capital gains tax (CGT) bill – Did you know capital gains tax can take a significant chunk of your wealth? This is why it’s important to work with a tax accountant before you sell major assets like properties, shares, or valuables. Depending on your specific circumstances, your tax accountant in London may recommend making a pension contribution (to lower your income tax bracket) or spreading asset sales over multiple tax years (to help you stay within your CGT allowance).
- Contribute to your pension plan – Does your business contribute to your pension plan? These contributions are considered as deductible expenses.
- Maximise tax-free expenses and benefits – Mobile phones for business purposes, travel expenses incurred for work, training and development costs, and health insurance contributions to a registered health insurance scheme are usually tax-free for both employers and employees.
- Time capital expenditures – The Annual Investment Allowance allows you to claim full tax relief on qualifying capital expenditures, such as purchases of equipment, machinery, etc., up to a certain amount.
- Pay yourself – If you own a limited company, pay a small salary to yourself up to a personal allowance and use the rest as dividends. It could be a tax-efficient way to minimise tax payments. Consult a tax accountant in London to determine the most tax-efficient way to pay yourself based on your specific circumstances.
Do you need more tips?
Here at Allenby Accountants, we carefully tailor strategies to reduce your tax bill according to your unique situation. Don’t hesitate to get on touch to engage a tax accountant in London for more personalised advice. Call 0208 914 8887 or request a callback.
