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Plan now, Save Later - End of year tax planning

24 February

With an election being imminent the 2010 Budget may well only have a very short shelf life. The pundits will no doubt debate the finer points for a while, but you have a business to continue running.

It is clear that 2010/11 will be a challenging year from a tax viewpoint and there will be little scope for an easing in tax rates. So, what can you do to take advantage of existing reliefs and prepare for areas in which taxes might arise in future?

Graham Boar, Tax Manager at WKH in Letchworth Garden City, highlights some changes to be aware of in April 2010:

• The temporary first year allowances of 40% for most plant and machinery in most businesses come to an end
• The fuel multiplier for company cars will increase to £18,000
• For 5 years from April 2010 there will be no benefit in kind on electric vehicles, so consider one of these or a low emission car. With the scrapage scheme finishing at the end of March, take advantage of this now if you can.
• Capital Gains Tax will almost inevitably increase
• The 50% tax rate for those earning in excess of £150,000 p/a will be introduced

You should consider carefully how to adjust your business finances to access the few reliefs and anticipate increased taxes.

It is also more important than ever to use your annual allowances such as the personal allowance open to you and family members, the Capital Gains Tax annual exemption, pensions, ISAs and Inheritance tax annual gifts allowance.

If your accountant is not managing these developments with you, then you should look into them NOW - before the end of the current tax year.

Contact Graham for more information on 01462 687333 or on gboar@wkhca.co.uk