With the end of the tax year fast approaching on 5 April 2023, there is only a little time left to get your affairs in order and make the most of the tax reliefs and allowances that are available to you.

With many changes on the horizon, our experienced tax team at Grunberg & Co has compiled the following checklist of the key investment and tax planning ideas that you should be considering now.

Dividend taxation: Have you utilised the zero per cent Dividend Tax Band of £2,000? Don’t forget that this relief is being reduced from April 2023 to £1,000, before falling again in April 2024 to just £500.

Corporation Tax: The rate of Corporation Tax is currently 19 per cent. However, this will increase from April 2023 for companies with profits of more than £50,000 to as much as 25 per cent for businesses with profits exceeding £250,000. Businesses with profits between these thresholds will benefit from marginal rate relief to reduce their effective rate of Corporation Tax.

Carry Forward: Given the changes, if you own a company, you may also want to carry forward losses into the new tax year to reduce your overall levels of profitability. If you face a higher rate of tax, you could, for example, increase your pension contributions or fund the purchase of a company car so that your profits remain below £50,000. You may also wish to consider whether it will still be tax-efficient to run your business as a corporate body.

Accounting dates: Did you know if your accounting year is different to the tax year and you are a sole trader or partnership, you will need to transition next year under the tax basis changes, which will most likely result in additional tax. Are you ready? you can offset your overlap profit and it may be worth considering any planned expenditure in the transitional year 2023/24.

Capital Gains: Have you used your annual exemption for 2022-23 of £12,300? Be aware that the annual exemption is being more than halved to £6,000 from April 2023, and then reduced further to £ 3,000 from April 2024.

Capital Allowances: Have you purchased any required items before your business year-end to ensure these allowances are available a year earlier? The Annual Investment Allowance will now remain at £1 million, so you should make sure you make use of this and the other capital allowance schemes.

It might be worth deferring eligible expenditure into the next tax year, so you can reduce taxable profits after the Corporation Tax rates increase in April 2023. This may include taking into account the new ‘full expensing’ rules in the new tax year as well.

Research & Development tax credits: Have you claimed for all your eligible R&D projects to take advantage of the significant benefits available?

Under the SME scheme, HMRC will allow an extra 130 per cent of identified costs to be written off against taxable profits on projects that have led to the creation of new products, processes or services or modifying an existing product, process or service.

Claims can even be made against innovations that resulted in a loss. Be aware that from April 2023, the additional R&D tax reduction will be reduced to 86 per cent, while the tax credit for loss-making companies will also be reduced from 14.5 per cent to 10 per cent for all but the most R&D intensive firms (i.e. those with 40 per cent R&D expenditure). It might, therefore, be beneficial to bring eligible R&D expenditure forward.

Directors Loans: Have you used the tax-free interest amount on any loans to your business? Depending on your income level, you could save up to £1,000. Take note that the interest allowance is reduced from £1,000 to £500 in 2023.

Need help with tax planning?

Don’t let the tax season catch you off guard! Get ahead of the game and secure your financial future by taking advantage of our tax planning services before the year-end deadline on 5 April.

Whether you’re an individual or a business owner, our expert advisors are here to guide you through the complexities of the tax code and help you make informed decisions that will save you money in the long run.

So why wait? Contact us today and let’s start planning for a brighter financial future together!

and let’s start planning for a brighter financial future together!