There are just two months left before the end of the 2016-17 tax year. Those tax payers who have income from business or property sources, and have not yet considered their tax planning options for 2016-17, should do so as soon as possible.
Most tax planning options expire at the end of the tax year. You may lose an opportunity to ensure that you making the most of legislation that is legally available. For example:
- The timing of investments that attract capital allowances, new plant, equipment and commercial vehicles.
- VAT: are you using the most advantageous method to calculate VAT each quarter?
- Is there an opportunity to involve your family in the business?
- Should you take bonuses or dividends before or after the tax year end?
The same considerations will also apply to property owners that have rental income. Additionally, buy-to-let landlords who have borrowed heavily to grow their portfolios should be considering the effects of the gradual reduction in tax relief on their mortgage and finance interest from April 2017.
A review can, and probably should, include a realistic estimate of your various income sources for the tax year. For example, this would enable you to:
- arrive at a realistic estimate of profits for the current financial year,
- make decisions based on this estimate that will benefit your longer term goals,
- take time to consider the effects of the current year’s performance on your business investors, your bank, your staff,
- it will also give you space to consider the ability of your business to sustain your current and future remuneration and withdrawals from your business.
Another word for planning is forethought. If you don’t plan, you are apt to end up considering the reasons why things have not worked out as you expected – you will stare at the open stable door, and the empty stall, and wonder why you never repaired the lock.