Dealing with Taxes, as we know, is one of the great inevitable in life, but you can manage your financial affairs to minimise the impact of tax for you, your family and your business. Effective Tax planning is the key. In fact, the government actually actively encourages you to make the most of the reliefs, concessions and allowances available.
Tax Planning Tips
While aggressive tax avoidance is now being targeted by HM Revenue & Customs (HMRC), you can still ensure your own financial well-being by saving tax wherever (but not however) possible. When considering any tax planning there are four important points to bear in mind:
- If a tax avoidance scheme sounds too good to be true, it probably is. In particular, do not get involved in a tax scheme that relies on the non-declaration of income or capital gains, as that would be illegal. A general anti-abuse rule counteracts tax advantages arising from abusive tax avoidance arrangements.
- Tax planning can be undone by not submitting the correct tax information on time, or not paying your tax liabilities by the due date. In either case, HMRC will levy penalties which could exceed the tax due, or wipe out any tax savings made. You could also find HMRC pays closer attention to your tax affairs in the future.
- Tax rules and rates change regularly. The tax regime is subject to frequent changes, so you need to regularly review your financial situation. Last year’s tax saving idea could be counter-productive this year. In this regards, Osborne Training does great job by offering accounting courses on various tax and accounting issues.
- Bear in mind that the tax effect of a decision is only one element to consider. The commercial, practical and financial implications of the decision should always be taken into account. For example, you should not let the tax tail wag the investment dog.
Finally, contact us if you require any further assistance with your tax planning. Don’t leave it for last minute.