Income Tax saving ideas

Here’s an overview of some key strategies to make the most of this financial year's savings opportunities:

• Pension contributions: You can now invest up to £60,000 annually in your pension (up from £40,000 before 5 April 2023), including both employer and personal contributions. The more you contribute, the more tax you save, as pensions reclaim basic rate tax directly from HMRC, boosting your investment and you can save higher rate tax through your tax return. Additionally, you can catch up on unused allowances from the past three years, though not all of it may qualify for tax relief. Pensions grow tax-free and aren't subject to inheritance tax.

• ISAs: If you haven't used your £20,000 ISA allowance for 2023/24 yet then consider investing before 5 April 2024. ISAs are great for saving on taxes for both cash and shares, especially with rising interest rates and shrinking dividend and capital gains tax allowances in the next financial year.

• Other investments: Look into EIS, SEIS, VCT, and Social Investments for potential tax reliefs of at least 30% (50% for SEIS) on investments, plus capital gains tax benefits. These can be key parts of a tax-efficient investment strategy.

• Gift Aid: If you donate to charity, ensure those donations are Gift Aided to claim basic rate tax relief, which the charity then claims back from HMRC. This can also save you higher rate tax.

• Asset sharing with your spouse: Optimise how you and your spouse hold assets like property, shares, or savings to maintain the best tax position between you for 2024/25.

Remember, it's crucial to discuss your specific situation with a tax adviser to ensure you're making the most of these opportunities.

As always, we’re here to support you so please do get in touch.