As the shops sprout Christmas decorations and our email inboxes fill with special Christmas offers and family plans, it’s hard to maintain the focus on business as usual, much less forward planning.
Christmas turns into New Year’s Eve, 2018 turns into 2019, and soon attention will shift to the self-assessment deadline of 31 January. That means a busy month for accountants all across the country after the festive period.
With all these distractions it can be all to easy to forget that the clock is also ticking on the ‘use it or lose it’ reliefs and allowances. Reminding clients that the other year end – for the tax year – is only four months away is an important message, one that risks getting lost between stuffing and filing.
This year is especially tricky as we all wait for clarity on the final Brexit deal, with the exit date set for 29 March 2019, just one week before the tax year ends.
A new government-funded study from a variety of high level think-tanks just published has claimed that Brexit will ultimately affect living standards by the equivalent of up to £2,000 per person.
As we get closer to the realities of a post-Brexit economy, it’s even more important to keep your clients engaged with their individual, family and business finances.
- Could couples transfer income between partners to minimise higher and additional rate taxation, to maximise the tax-free savings and dividend income limits, or to avoid losing child benefit?
- Have those over 55 discussed their options for drawing pension savings?
- Have business owners considered the timing of dividends and bonuses to minimise tax rates?
- Are they preparing to make use of this year’s ISA allowance and make any other tax-efficient investments in EISs, SEISs and VCTs before 6 April 2019?
- Can they use their annual CGT exempt amount by making any available disposals before 6 April 2019?
- Have they discussed making gifts to use their annual IHT allowances?
- Are they investing enough in their pension (or possibly a lifetime ISA) if they wish to, or have to, retire earlier than state pension age, which is likely to keep going up?
There are of course many other areas of year end tax planning to highlight to clients, whether as part of a general review, new year message or targeted campaign. Encouraging some forethought now should make for grateful clients and a smoother end to the tax year.