Not only does the new tax year start this month, but it is also National Stress Awareness Month which might feel ironic due to the potential stresses a new tax year can bring.
We want our clients to embrace the theme of Stress Awareness Month which is ‘Little by Little, a Little becomes a Lot’ and take small but stable steps towards making the new tax year as stress-free as possible.
Our team have outlined their top tips to avoid those tension headaches in the new tax year by making full use of your personal tax allowances.
You might feel the pressure to sort out your finances as soon as the new tax year starts but, if rushed, this will only add to your worries.
Planning as soon as the new tax year starts will help you get your priorities in order and help you to avoid a stress-free end of tax year when the time comes.
The Spring Budget has also brought new changes which will come into effect during the new tax year so it is important to stay up to date with the changes and know how you can navigate the personal tax obligations you might face.
Incorporating these steps as you enter the new tax year will ensure your processes are streamlined and worry-free:
Step 1 – carry out a monthly check of your account to ensure the figures are correct and you are compliant with any tax obligations
Step 2 – make note of the changes from the Budget
Step 3 – claim all expenses to which you are entitled to
Step 4 – avoid mistakes and inaccuracies
Step 5 – seek the advice of our accountants early
Tax allowances help to reduce the amount of income tax you have to pay, meaning you can save more money as the year goes on.
You only pay Income Tax on taxable income that exceeds certain tax allowances.
However, not all allowances work in the same way.
For example, some reduce the amount of income that you have to pay tax on whilst others provide an amount (a tax credit or tax reducer) that you can set against your tax liability to reduce the amount of income tax you pay.
There are many UK tax allowances you might be eligible for, which include:
You are only eligible for UK tax allowances if you:
If you do not use your tax allowance, you might be able to transfer them to your spouse or partner.
These allowances are transferable, either completely or partially:
It is important you understand what allowances you are entitled to and how you can claim them if you wish to streamline your new tax year processes.
The changing economic situation we all face will put pressure on your finances so it’s important you take the right steps to save your money and remain compliant with your tax obligations.
Ultimately, ensure your financial records are in order right from the get-go.
5 April will be here in just three days, so planning your finances as soon as the year starts will help you remain organised and keep everything in order.
Knowing what you need to do will ensure your tax year is easy and as stress-free as it can be.
As said before, the Spring Budget has changed some tax obligations, such as changing the main rate of Class 4 NICs for the self-employed from nine per cent to six per cent, so knowing exactly what to expect from your tax requirements will help make the process much more straightforward.
Consistently review your finances as the year progresses to ensure you are on the right track to meet your obligations or need to adjust if needed.
Engage with your accountant as early as you can – this will ensure you are prepared for the year ahead, which will maximise your finances and reduce your stress levels.
Taking the right steps, no matter how little, will create a straightforward and relaxed tax year that will benefit you for years to come.
To maximise your tax allowances for the new tax year, please get in touch with a member of our friendly team today.
