Start your tax year end planning early
The start of the new year is traditionally the time when tax year end planning comes to the fore in the financial planning calendar.
There will be (perhaps material) exceptions, but for many, planning those important conversations with the likes of accountants and financial advisers in the three months leading up to the 5th April is becoming ever more important. This will also give sufficient time for action, and will be close enough to the “closing date” to give the conversations the feeling of urgency that you may need.
Of course, the end of the tax year also brings excellent tax-efficient investment opportunities to further help your situation. The 5th April is the last day in which you can make use of your £20,000 ISA allowance for example. This is important if you are looking for a tax-free investment vehicle in which to house a wide variety of different funds, stocks and shares to order to obtain growth.
But does the General Election on 12 December create a responsibility to ensure that tax year end planning conversations are had before that? Well, I don’t have the manifestos yet, but I can be pretty sure that tax under a Labour Government or Labour led coalition of some sort (formal or informal) would be very different to that we are currently living with – on all fronts – income tax, capital gains tax, inheritance tax and corporation tax. From the little I have (largely from papers released at their conferences) the Lib Dems also have some fairly radical ideas on the taxation of income, capital gains and inheritance. Even the Conservatives may decide to make some tax changes – though not so radical.
I reiterate that I do not have the manifestos, but I do know from what’s been said so far in the campaign that both Labour and Conservatives have ambitious spending plans. The point is that whoever gets into power and especially if we have a Labour Government the reliefs and exemptions currently available are unlikely to get materially better than they are currently.
So, in light of all this, it’s becoming ever more important to run a ‘tax year end health check’ ahead of the election to at least ensure that consideration is given to identifying the reliefs and exemptions available to you, and to discuss the relevance and appropriateness of acting to improve your “tax health” - sooner rather than later. If the only reason action hasn’t been taken to date is just not having “got around to it” then the added incentive that some of the reliefs and exemptions available now might not be after the first Budget – which would probably be in January – maybe the encouragement you need to bring forward action that might otherwise have taken place later in this tax year.