End of Tax Year Planning

The tax year ends on 5th April, but there is still time to make the most of your tax allowances.

It is always a good idea to carry out a yearly review of your finances, and what better time to do it than during the run up to the end of the tax year. Contractors suffer enough at the hands of HMRC so any opportunities for minimising tax should be grasped with both hands. Make sure you don't miss out on your chance to save on tax and take home more of your hard earned cash this year.

Pensions

The tax relief offered on contributions to pensions offers a great opportunity for you. Maximise the tax benefits with one off contributions before the tax year ends. You can also benefit from full tax relief on contributions to a pension for your children or grandchildren up to £3600 per tax year.

If you have any spare cash then you should consider making use of your full allowance which enables you to invest up to £235,000 into a tax efficient investment arena. This could leave a worthwhile legacy for your time as a Contractor as it could make a significant difference to your nest-egg for retirement.

Investments

Take advantage of your annual ISA allowance by investing up to £7200. If you have not already invested up to your limit then consider putting in a lump sum, however for next year it is advisable to consider drip feeding money into your ISA to spread the risk. This is especially useful for Stocks and Shares ISA savers as it allows you to minimise the effects of short term fluctuations in the stock market.

If you have children or grandchildren then you can also invest up to £1200 per tax year in a child trust fund. This is an easy way to start a university fund for your child or simply to put aside an inheritance for them.

Return to Articles page