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Tax planning is something which we believe should be ongoing year round. Not only looking at where you’ve been, but looking ahead at where you’re going and having the right plan in place to tackle any issues you might face.

your best friend when it comes to saving tax.

However, regardless of the forward-thinking plans you might have in place, taking one final look back before the year end is very important. Month 11 might just be your best friend when it comes to saving tax.

As a minimum, with one month to go before your year end, we like to pull together the accounts for the first 11 months of the accounting year. This gives us the chance to see where things are at, how your business has done for the year, and what your potential tax liabilities are likely to be.

Personally, I feel that getting notification from your accountant of your tax bill only days before it is due to be paid is completely unacceptable. Unfortunately, it’s a practice which many taxpayers and businesses have no doubt experienced at some point in the past.

If I have anything to do with it, experiences like this will be something of days gone by.

With many taxpayers having year ends of 31 March or 5 April, this usually results in scrambling to find cash around Christmas time – a potentially unwelcome surprise at a time when business may be quieter, and personal cash has already been used to fill stockings.

If I have anything to do with it, experiences like this will be something of days gone by.

By reviewing the month 11 figures, we can work together to smash down your tax bill before it’s too late.

Some solutions might include:

  • Pension contributions – these must be paid prior to your year end in order to be effective for tax purposes. There’s no ‘backdating’ which will help you once the year end has passed.
  • Dividends – we’ll get the best amounts declared, and the correct paperwork drawn up in order to squeeze every penny of savings from the tax man’s current set of dividend tax rules. Does your spouse need to be brought into the equation? We’re still in time to consider that too.
  • Salary – you and your staff might have been taking a regular salary throughout the year, but a bonus or one-off declaration in month 12 can lead to some nice tax savings. Let's see what's best for you!
  • Rent – if you own any assets personally which are used by your business, we may have flexibility over what rent the business pays you for their use. Depending on your situation, this could be a tax efficient way of extracting money from your company.
  • Asset purchases – month 11 really is the champion when helping decide this. We always recommend only buying new equipment when it is needed, rather than just to save tax, but if you’re if you’re looking to get immediate cashflow benefits on your purchase, month 11 is the time to commit to assets in order to access capital allowances.

Shiny new Hilux for the year end, anyone? Yes please.

These are the ‘big 5’ areas which we’d typically explore for you. Of course, when it comes to month 11 planning, there are a range of other considerations we have up our sleeve. Perhaps it includes writing off a directors loan account, or purchasing additional shares to boost the balance sheet, the list goes on.

As with all of our tax planning work, every plan we come up with is bespoke to you. We’ll put everything that’s relevant to you on the table, consider all possible angles and tax reliefs, and leave you with something which ensures you keep as much of your money as possible, and works in your favour for the long term!

If you’d like to discuss your situation further, feel free to check out some of the services below and contact us to book a no-commitment, no-fee initial consultation, and we can work out what’s going to be best for you going forward!

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CRC Accountancy
22 East Road, Kirkwall, Orkney, KW15 1HZ

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CRC Accountancy
22 East Road, Kirkwall, Orkney, KW15 1HZ

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