For sole trades and partnerships with accounting years ending on 31 March/5 April, if you have budget left over or need to purchase capital equipment (up to £50,000) then do this before your year end. Spending in this tax year means you will receive tax relief this January rather than having to wait two years. It makes for a sensible tax planning strategy for sole trades and partnerships given that income tax rates are double those of companies.

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk on spending this tax year and how to claim for losses.

Capital Gains Tax is hotly tipped to increase in 2010 so if you are considering selling any assets then best to do so before the Budget. Furthermore any of the Capital Gains exemption (£10,100) that is not used in this tax year will expire on 5 April.

The absence of any change to CGT is seen by many commentators to be linked to the forthcoming election. So once this has passed changes to tax are anticipated. By acting now it is possible to fix your CGT rate to 18% even if you still want to keep possession of the asset.

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk for practical Tax Saving solutions.

Shareholders of family companies should consider the timings of dividend payments to ensure maximium tax-efficiency especially those who anticipate paying tax next year at the new top rate of 42.5%.

Where company reserves allow, individuals facing this position might want to consider taking dividends before 5 April thereby paying tax at 32.5% gross. The reverse advice would apply to those facing falling revenues, as deferring a dividend until after 5 April could reduce or even eradicate their tax liability.

HMRC will be looking hard at large payments in early April so timing is crucial. Contact Mark Busby NOW on 01344 620495 or mark.busby@dbsellek.co.uk

Income realised before 5 April will be taxed at 40% therefore representing a 10% saving for top rate tax payers. With just under one month to go before the new top rate of income tax comes in for those earning £150,000, consider restructuring the ownership of income assets with spouses or civil partners to avoid either of you earning £150,000. As an alternative you could switch to a Capital Growth strategy where gains are currently taxed at 18% (but bear in mind this rate is tipped to change or could change). HMRC are looking closely at the timing of dividend payments. If not robust, they may argue the dividend was paid in 2010/11.

Contact Mark Busby NOW on 01344 620495 or mark.busby@dbsellek.co.uk to discuss ways we can help.

Make use of tax-efficient investments such as ISAs and Pensions. Don’t waste this year’s ISA allowance invest before 5 April. If you were born before 6 April 1960 the maximum you can save is £10,200 (since 6 October 2009). Half can be invested in cash and the remainder in stocks and shares. If you were born after this date you can invest £7,200 this tax year. From April 6 everyone will be able to save £10,200.

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk on ways we can help with tax-efficient investments.

Pensions have become ever more complex with high earners not only facing pension relief curtailment but also penalties for large contributions (£20,000 or more).

While pension relief has been curtailed for those earning £130,000 or more, those earning less can contribute up to 100% of their salary.  Non-earners can still benefit from tax relief on gross contributions of £3,600 per annum.

Those earning £130,000 or more should seek the latest advice on pension relief and contributions, since the tightening of rules in the Pre-Budget. Now any pension benefit contributed by an employer or third party will be taken into account when calculating whether your income exceeds £150,000.

There are also pension relief restrictions preventing individuals from making large irregular annual pension contributions before 6 April 2011. This affects those earning £130,000 (where an employer’s contributions takes them above the £150,000 income level).

**Stop Press**  the minimum age you can take your pension is rising to 55 on 6 April.

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk  for help with tax-efficient investments and financial planning.

Don’t overlook transferring assets to your spouse if they are lower earners. This makes use of their personal allowance (£6,475) and also capital gains allowance (£10,100). You can also make use of a spouse’s basic rate tax band at 20% on earnings up to £37,400.

You can register investments in joint or sole names and married couples and civil partners can share income 50:50 by simply registering title in joint names.

Contact Mark Busby for more information 01344 620495 or mark.busby@dbsellek.co.uk

A report by Capita Registrars has found that shareholders in UK companies saw dividend payments cut by £10bn.  No surprises that those investing in the banking sector were hit the hardest. In fact UK company payments to investors in 2009 were 15% down on the previous year. The outlook for this year is not much better with dividends expected to grow but only by 5%.

So for those of you who pay your tax on account you may find you have overpaid. If you think this applies to you please call me on 01344 620495 to see how I can help.

With a record number of 9m taxpayers expected to file their tax return online - don’t delay. Tax returns and payment of tax must be with HM Revenue & Customs by midnight 31 Jan or you risk paying a penalty of £100. 

First timers need to remember it can take more than a week to register to file online and then you have to wait for an activation PIN.  Go to www.hmrc.gov.uk/sa  and click on register for self-assessment online.

If you need any assistance please contact me on 01344 620495 or mark.busby@dbsellek.co.uk

With the proposed hike in 50% income tax why not consider taking salary as dividends to minimise your tax bill. Shareholders in their own companies who take dividends instead of cash means you are taxed at 32.5% until 5 April, rising to 42.5% on 6 April.

For practical advice contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk