Just as sure as the Easter eggs are lining the supermarket shelves and the hot cross buns are sitting in the bread bin, the end of the current tax year is fast approaching… though, often, it’s not nearly as sweet.
End of Tax Year Checklist
But don’t be disheartened. There are a few things that you and your small business can do in the run up to the end of the tax year to get your accounts in ship-shape and keep you full of the joys of Spring. Here they are:
Use your ISA allowance
This may seem like obvious advice, but there are so many people who still haven’t got an ISA or have one but don’t use it. As Mr Money-saving-expert, Martin Lewis OBE says, “If you don’t use it, you lose it’. Any leftover allowance of the £15,240 figure for adults in this tax year will not roll over to the next – so take advantage by saving using as much of this years’ tax-free allowance before 5th April. If you don’t have an ISA here’s a guide to some of the best Cash ISAs for 2015-2016.
Use your Full Personal Allowance
This tax year, the personal allowance (the amount an individual can earn before paying tax) has risen to £10,600. For low earners who are married and earn less than this, there is the option of transferring part of this unused allowance to your spouse. Find further information about the Married Couple Allowance here.
Make Pension Contributions
UK taxpayers can get tax relief on their pensions contributions of up to 100% of their earnings (or £40,000 if lower) for the 2015-2016 tax year. For workers who do not earn enough to pay tax, relief is limited to contributions of £3,600 or 100% of your earnings – whichever is the highest amount. You can read more about tax relief on private pension contributions here.
Gift Aid Donations
If you’re making a donation to a charity, good on you. Just make sure that you agree to gift aid it. Individuals who are taxed at a higher or additional rate can claim the difference between the rate you pay and the basic rate on your donation. Find out more about tax relief on charity donations here.
Be Aware of Changes to Dividends
The 2015-2016 tax year is the last time limited companies will be able to pay out dividends under the old tax regime as the new rules come into play from 6th April 2016. For more information, read HMRC’s Dividend Allowance Factsheet.
Look Out for the Budget
On Wednesday 16 March, the 2016 Budget will take place. Be on the look-out for any immediate changes that will affect you and your business.
And finally, perhaps our most useful bit of advice on the subject…
Ask an Accountant
If worrying about your tax return alongside running your business is all getting a bit too much, hiring an accountant could really help to take the weight off your shoulders. What’s more, getting a professional to take control of your accounts can be classed as an allowable business expense. But don’t delay. We’d suggest hiring an accountant as early as possible as the good ones tend to get busier and busier the closer it gets to the January tax return deadline.
If you’re unsure where to look for an accountant, ask around. Our business centres are home to a wide variety of businesses, so chances are that there’s an office suite or a hot desk with an accountant ready and willing to help. Being able to talk face to face and catch up regularly is just one of the benefits of finding someone close by – which is exactly what these two members of The Workstation community found when they came to collaborate.
If you’re a member of The Workstation community and would like us to help put you in touch with another business working in one of our centres, please get in touch by emailing us here.