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TOP 10 TAX TIPS WITH IAN HAYNES, TAX DIRECTOR AT HAINES WATTS SCOTLAND

Tax rules are constantly changing and we believe it’s critical to ensure our clients are kept up-to-date with all the latest legislation. Our tax expertise is focused on helping you reduce your tax burden and enhance your potential tax savings.

Haines Watts have been helping people with their tax queries for over 90 years. So, we’re confident we can ensure our clients get the best possible tax advice.

Our specialist Ian Haynes, Tax Director at Haines Watts Scotland, said “Tax touches so many aspects of our lives and in so many different ways, so it can be rare to find a ‘one size fits all’ answer despite how similar the question may seem to others.  We aim to identify the unique aspects relevant to our clients, to make sure that the best solutions are put forward”. 

Here are some top tax tips to help you decide if maybe there’s a need to have a chat and find out more about potential changes you could make to enhance your tax position.

1. Capital gains on residential property – If you sell a residential property and make a profit, you may need to make a report to HMRC and pay any capital gains tax over within 60 days of the disposal.  You may not be required to do so if you meet certain conditions, but there is a penalty for non-submission so it’s better to check first.

2. Own your own company – If you are self-employed, should you be operating as a company?  If you already operate your own company, you may wish to review the current share structure.  There may be alternatives to the existing arrangements that allow more income from your company to be extracted either tax free or at more beneficial tax rates.

3. Pensions – Each year, most individuals can have up to £40,000 of contributions that attract tax relief.  If you do not use all of this annual allowance, the balance can be carried forward for three years, to allow ‘catch-up’ contributions to be made, although there are certain conditions that must be met.

4. Investment property – if you own let property, this will generate taxable income and possibly capital gains tax on an eventual sale.  There may be alternatives to holding property personally, which may be more tax effective both now and in the future.

5. Company cars – If your employer provides you with a company car, consider switching to an electric model.  The comparative tax cost should be a lot lower that the petrol or diesel models, and your employer will be able to claim tax relief of the cost.  In many cases, choosing an electric version can now mean that there is an overall saving when compared to using carbon based vehicles or your own car.

6. Tax efficient savings – If possible, aim to utilise your maximum annual ISA contributions (£20,000 for 2022-23), as this allows tax free growth within the ISA as well as being able to receive interest tax free each year.  Remember that each individual has their own ISA limit.

7. Rent a room – You can let a room in your home and receive up to £7,500 per year tax free, under the Rent A Room scheme.  You do have to live in the property while it’s being let, but this can be a tax efficient way to utilise the extra space in your home.

8. Tax code checks – Make sure to check your tax code to ensure it contains all of the correct allowances and reliefs you are entitled to.  If you have more than one PAYE source of income, it’s important that you review your tax codes for each source so that you don’t have duplicate entries, as this could result in unpaid tax for the year.

9. Claim your Gift Aid – If you are a higher rate tax payer, you can claim additional tax relief on any charitable donations you have made where a Gift Aid declaration was completed.  You may also be able to claim relief for small amounts even if a declaration wasn’t signed.

10. Capital losses – If you regularly have disposals of assets within the capital gains tax rules (perhaps of shares in an investment portfolio), consider postponing disposals where a loss is likely to arise.  Capital losses in the year must be relieved against other capital gains first before being carried forward, and could mean you waste your annual capital gains tax exemption.

If you have any concern, do not hesitate in contacting us, we are always here to help you in any matter of your business.

For information on Haines Watts services contact stirling@hwca.com or 01786 649474.

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