Establishing your strategy as early as possible can alleviate the pressures of tax planning.

Familiarising yourself with deadlines and thresholds will help you prioritise and reduce the stress associated with the end of the financial year.

Additionally, this year’s Spring Budget introduced changes to personal and business taxes that may affect your tax liabilities, such as a reduction in National Insurance for employees.

Keeping updated on these changes as they occur will help you manage stress and gain a clearer perspective on your financial planning.

Allowances and reliefs available

Tax reliefs provide deductions from taxable income and are commonly applied to business expenses to encourage investment in specific capital.

However, some reliefs also benefit individuals, such as those related to pension contributions.

You are only required to pay Income Tax on taxable income that exceeds your Personal Allowance, currently set at £12,570.

This is the standard allowance given to each person, but you may be able to increase your tax-free income threshold through the following:

  • Marriage allowance: You can transfer up to £1,260 of your Personal Allowance to your spouse or civil partner if you earn below the £12,570 threshold, potentially saving you up to £252 per tax year as a couple.
  • Married couple’s allowance: An older form of Marriage Allowance, this can reduce your tax bill by between £401 and £1,037.50 per year, provided one of you was born on or before 6 April 1935.
  • Blind person’s allowance: If you are registered blind, you may qualify for an additional £2,870 on your Personal Allowance.
  • Tax relief for maintenance payments: If you were born before 6 April 1935 and are making maintenance payments to an ex-spouse under a court order, you may be able to reduce your taxable income.
  • Dividend allowance: If you receive both a salary and dividends, ensure you utilise your £500 dividend allowance.

There are typically residency requirements for UK tax allowances, so you will need to ensure you are eligible before you claim for any of the above.

For those of you who may have a substantial estate you may want to look into the changes to Capital Gains Tax and how this could affect your assets should you wish to sell them.

If you would like advice on how to maximise your tax allowances, please contact our team to discuss your personal circumstances.