Why is it once again, we find ourselves inundated with clients trying to “beat the tax-man” and use their tax allowances before the end of the tax-year when they have had all year to plan? Oh well, just a good job we are fully staffed (albeit working from home) and willing to help then, but why is it so important?
Firstly, the tax year ends abruptly at 11.59PM on the 5th April every year so if you have not used all your tax allowances they are lost forever. What type of tax allowances are affected I hear you say? ISA’s are the most obvious and allow you to save up to £20,000 per tax year and not pay tax on the income or growth. Secondly, pensions also grow tax-free but also benefit from the Government chipping in at your highest rate – ie, “free money” to you! ISA’s are on a “use it or lose it basis” so if you wake up on 6th April having not used it, bye-bye allowance for that year!
Remember, good financial planning is an evolving process that should be checked regularly and whilst some jobs need to be left until the end (such as making sure you drop into basic rate rather than the higher rate tax bracket), we encourage our clients to take control of their Financial Fortress! As always, contact your local experts for help!