With the end of the tax year on the horizon, now is the perfect time to refresh your company’s finance plans and maximise the available tax- saving opportunities. This will not only allow you to extract profit while keeping one eye on tax efficiency, but will also improve your retirement prospects – and that of your employees!
MAXIMISING YOUR COMPANY’S TAX EFFICIENCY
There are several ways to take profit or income from your business while reducing your company’s liability to Corporation Tax, Income Tax and National Insurance contributions (NICs) – for example, diverting your company’s pre-tax profits into a personal pension. You could also consider taking dividend income instead of salary to avoid NICs (plus, the first £2,000 is Income-Tax-free!). Many directors take an income from a combination of salary and dividends, supplemented by pension contributions – a financial adviser can help you find the right balance.
On a personal level, you could also take advantage of unused tax allowances from previous years. Even if you’ve used up your annual allowance, you may have an opportunity to invest more by April 5th, by making the most of unused annual allowances from the previous three tax years. This could, for example, allow you to make a significantly larger pension contribution in a single tax year.
INCREASING YOUR FINANCIAL RESILIENCE
We often hear that women are at a disadvantage financially, with the gender pay gap and pensions gap working against us. But another key issue is the fact that many women are still failing to view – and, therefore, protect – themselves as key earners. According to a survey from Canada Life, women are far less likely to prioritise protection insurance (for example, life insurance or critical illness cover), with more than half of all women aged between 25-45 not having insurance that could help to protect them against loss of earnings.
Neglecting protection insurance might be down to affordability or a belief that ‘it won’t happen to me’, but doing so is vital in protecting you, your business and your loved ones. International Women’s Day is just around the corner and I want to see more women protecting their financial interests!
CONTACT ME TODAY
Wherever you are on your business journey, it is important that you’re getting the right advice on planning for a financially secure future. If you have a question about tax efficiency or income protection, or would like more information about my services, please contact me today! Sources:
1, www.canadalife.co.uk, March 2018
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