Tax Year End Checklist 2021/22

2021/22

 

If your New Year resolution is to get to grips with your finances, now is a great time to review your position before 5 April, to see if you have utilised all the tax relief and allowances available to you. 

 

Here are some key points to consider;

 

 

  • Have you used your full tax-free ISA allowance?

£20,000 for individuals and £9,000 for juniors in 2021/22

 

  • Have you considered pension contributions?

The government adds basic rate (currently 20%) tax relief on contributions up to £40,000 plus additional tax savings are available for higher rate taxpayers. 

 

You can even pay into a plan for a non-taxpayer (e.g. non-working spouse or child).

 

  • Have you made use of all allowances and considered child benefit?

Higher earners could pay pension contributions to reduce taxable income and retain the full tax-free personal allowance or child benefit.

 

Married couples/civil partners can potentially transfer up to £1,270 of personal allowance to their spouse potentially saving tax of £254.

 

Employees working from home, even for as little as one day in 2021/22 can claim tax relief on £312 of household costs.

 

  • If you are a business owner, could you take profits before 5 April as pension contributions or dividends?

Directors taking dividends instead of salary will reduce NIC costs. The first £2,000 of dividends in 2022/22 are tax-free.

 

This tax-exempt amount will continue into 2022/23; however, from 5 April 2022 there is a 1.25% increase in the rate payable on taxable dividends to reflect the new NIC charge

 

Tax treatment depends on your individual circumstances. If you would like specific advice regarding any aspect of tax planning please contact your local Lentells office;

Chard; chard@lentells.co.uk, 01460 64441

Seaton; seaton@lentells.co.uk, 01297 20584

Taunton; taunton@lentells.co.uk, 01823 286274