Accounting News – Winter 2024

End-of-Year Tax Planning: Preparing for the New Financial Year

As the 2024/25 tax year approached, taxpayers faced a shifting landscape of frozen allowances, rising property taxes, and changing reliefs. Year-end planning was more important than ever.

For individuals

• ISAs – Maximise the £20,000 allowance before 5 April.
• Pensions – The higher £60,000 annual allowance means there’s more scope for contributions, with potential carry-forward from previous years.
• CGT and dividend allowances – Both were reduced further in 2024/25. Consider selling assets or declaring dividends before the year end to use current limits.
• Inheritance tax – Annual gifting allowances remain underused but can make a significant long-term difference.

For businesses

• Profit extraction – Directors should review the balance between salary, dividends, and pension contributions for maximum efficiency.
• Capital investment – With full expensing now permanent, there’s no rush to spend before year end, but early investment still helps manage cashflow and taxable profits.
• Employee incentives – Tax-advantaged share schemes remain a powerful way to attract and retain staff.

Key trend: fiscal drag

Although tax rates haven’t risen directly, frozen thresholds mean many people are paying more. Smart use of allowances and reliefs is the best way to offset this silent tax rise.

📞 Don’t let allowances go to waste. Contact our team today for a comprehensive year-end tax planning review tailored to your situation.