End of Tax Year planning 2005/2006 Return to BSG Valentine homepage
The busy period for Accountants is not over!
The 31st January deadline has passed for filing the 2005 personal tax Return but there remain other “tax housekeeping” issues.
Some of the important issues that may affect you are detailed below. Please contact us if you require any further information. This is not an exhaustive list and all tax planning requires careful and detailed review and advice before implementation.
Dates for your Diary:
28 February 2006 5% penalty for late payment of 2005 taxes
6 April 2006 New Pensions simplification rules
19 May 2006 Penalty for late filing of P35,P14 Employment returns
6 July 2006 Fines for late filing of P11d benefit returns
19 July 2006 Due date for Class 1A Nic on Company cars etc
31 July 2006 2nd installment on account of 2006 personal tax
31 January 2007 Gift aid donations made by 5/4/2006 available against 2006 tax and by election payments by 31/1/2007 can be c/b to 2006
Small company corporation tax due 9 Months after year end
Corporation tax returns incur minimum penalty of £100 if filed later than 12months after year end
Tax strategies:
Capital gains;
Realise capital gains after 6 April 2006 in order to postpone tax payment date by 12 months to 31/1/2008
Make use of capital losses particularly with assets that have negligible value.
Main residence election for a second home
A business trading loss can be offset against same and preceding year capital gains so consider realizing capital gains pre 5th April in order to mitigate any tax.
Make gifts to spouses of assets “pregnant” with gains to maximize use of the current annual exemption of £8500
Tax Shelters:
Consider investment in VCT (40% Income Tax) relief and Enterprise Investment schemes(EIS) (20% Income Tax relief) prior to 5 April to take advantage of income tax and for EIS also capital gains reinvestment relief.
Tax w/o shelters by there very nature carry significant risk. Consider investment in own Corporate structures to maximize tax relief’s.
Film Finance Relief’s are still available and these offer tax deferral.
ISA's are an option for tax efficient savings.
Pension planning particularly with the new regime commencing 6 April 2006.No previous year carry back of contributions from 6 April 2006 is available.
Business tax planning:
If trading from a Ltd Company, consider use of dividends rather than bonuses in order to mitigate NI
Consider LLP structures and Incorporation of your existing business
Borrow in a tax efficient way to maximize interest relief
Consider releasing equity in investment property by further mortgage borrowing and obtaining increased tax relief on interest
Subject to cash flow accelerate capital and expenditure decisions before your year end to receive tax relief earlier.
Energy saving technology attracts 100% capital allowances
On Plant and machinery small/medium size business receives 40% First year allowance. (50% FYA from 1/4/2006)
Consider the role of your spouse/partner in the business to maximize unused allowances and lower family tax rates
Reconsider Company car and fuel options
Structure Pension contributions from your company to personal plans
Inheritance tax:
Make sensible gifts if IHT is of concern but only gift what you can afford.
Review your assets and make a tax efficient Will
Review insurance cover
Utilize annual exemptions
Working with us and your Advisors:
Tax planning requires input mainly from qualified Chartered Accountants but other specialist advisors are also required. We are fortunate to work with nominated advisors including Lawyers, Financial and Mortgage Advisors.
Please contact us as required.
2006 Tax Year:
All our Personal tax clients receive a reminder normally every April/May detailing the year end information required to commence preparation of the Annual Personal Tax Return. Please remember to complete the checklist and submit documentation ASAP to enable us to advise on your tax position and consider planning issues as early as possible.
Important:
This information is provided to assist BSG Valentine clients with Taxation planning and full professional advice must be taken prior to any implementation to ensure all issues relevant are considered.