The Basics of Tax Planning

No one likes paying tax. But, sadly, it’s one of those facts of life that we all have to pay it at some time or other. We know from experience though that it can be a daunting topic to get to grips with. So, we’ve asked our trusty tax specialists to jot down the basics of tax planning in some easily-manageable, bite-sized points. Enjoy!

The basics of tax planning – the low down

In a nutshell, tax planning is an important aspect of managing your finances. It basically ensures that you are paying the leastcorrect amount of tax on your income and assets, as required by law. In the UK, there are several key things that you need to know to effectively plan them – and failure to do so will result in penalties or fines.

First and foremost, when considering the basics of tax planning, it is important to understand the different types of taxes that you may be liable for in the UK. These include income tax, corporation tax, capital gains tax, inheritance tax, and VAT, among others. Each of these taxes has different rules and exemptions. So, it is important to understand how they apply to your specific situation.

The Tax Year

Another important aspect of tax planning in the UK is understanding the tax year. The tax year runs from April 6th to April 5th of the following year. During this time you should will need to file your tax return and pay any taxes owed. It is important to keep accurate records and receipts throughout the year, as these will be necessary when preparing your tax return, which (if required) then has to be submitted by 31st January.

Minimising your Tax Liability

This brings us on to the ultimate basics of tax planning – namely why is it of importance to you. Well, as we alluded to above, no one likes paying tax. So, most people will want to find out the most effective ways to minimise their tax liability. This is where tax planning comes into its own – and why we love it so much at Lewis Brownlee.

Tax planning allows us to take advantage of various tax allowances, reliefs as well as tax-efficient investments and savings plans. Tactics we employ include considering remuneration strategies, pensions, trusts, varying asset ownership as well as claiming bespoke reliefs for research and development projects and capital expenditure.

Tax laws and Regulations

The basics of tax planning also covers keeping in mind the changes in tax laws and regulations. Tax laws and regulations are subject to change, so it is essential to stay up-to-date with the latest developments. This can be done by regularly checking government websites, consulting with a tax professional, or subscribing to tax newsletters. Equally, it can be done by having professionals (like us) ensure it’s all factored in for you!

It’s an ongoing process – year in, year out!

Finally, it’s important to remember that tax planning is an ongoing process. It’s not a one-time event, much to the disappointment of many people. It’s important to review your tax situation regularly and make adjustments as needed. That ways you can ensure that you are paying the correct amount of tax and taking full advantage of all available tax-saving opportunities.

So, there we have it, the basics of tax planning! Remember, tax can be a complicated area but there is no reason you can’t understand it. Our tax specialists can take all of the hassle out of tax planning by doing it for you. But, they are also experts in explaining the complications in clear and manageable ways . So, whatever your level of tax planning understanding, we have an offering to suit everyone’s need.

Please do get in touch to see how we can help on 01243 782 423, or email us from our contact page and someone will be in touch!

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