9 situations where tax advice can save you time and money
Tax planning isn’t normally top of people’s list of things to do, and I’ve met many clients who have either missed an opportunity to reduce their tax bill, or left it too late to implement the most effective planning opportunities. So it’s easy to suggest that people should take regular advice, but there are certain life-events and situations where seeking appropriate advice is particularly important and advantageous:
During your annual tax submission: No tax year is exactly the same, both in terms of tax rules and your personal circumstances. A good time to review your affairs is when your UK tax return is being prepared, as you can compare the previous tax year with your expectations for the future. Look for a tax adviser who offers a comprehensive tax return service where they keep you up to date on relevant changes in legislation, rather than offer a form filling service.
If you are moving country: If you are moving to or from the UK then you should seek advice before you move. It is a good time to review the ownership of your assets, and there are tax planning opportunities available which could reduce your UK tax liability. Timing is everything, for example if you are expected to become UK tax resident, some of the planning can only be undertaken when non-UK resident.
With a change in income: This could take many forms; perhaps you have a new job and are earning over £100,000, you receive a large bonus, you are retiring or taking a career break, or you are on maternity leave and expect the split of family income to change. No matter what the reason, if your income is expected to increase or fall for the future, taking stock of available allowances, reliefs, and the timing of other transactions (e.g. sale of a property), can have a big impact on your tax liability.
When planning your will: If you are looking at ways to save more for the future (ISAs, pension contributions, gifts or savings for children), or are considering whether your loved ones would be catered for if something happened to you, a review of your tax position will give you clarity on how to optimise your tax position. Inheritance tax is often referred to as a ‘voluntary tax’ and the first step is to understand your exposure so that relevant options for you and your family can be discussed.
If you have a change in assets: This could be aa planned sale or purchase of a property, receipt of an inheritance, or sale of company shares. Understanding the tax position before making any changes, as well as understanding the correct reporting requirements can save you from an unexpected tax bill, or penalties from failing to meet an HMRC filing deadline.
If you have Non-UK assets: Owning assets outside the UK can be advantageous, however it can also complicate your tax position. The UK has Double Tax Agreements in place with many jurisdictions, and these need to be analysed to determine which country has the taxing rights on the specific income or gain.
If you are a Non-UK resident: Being non-UK resident but holding assets in the UK, such as a portfolio or investment property can result in relatively small, or no UK tax charges. However legislation has changed in recent years, and the administrative and tax burden has increased. Ignorance of changes is not an excuse and so having a UK tax adviser who will keep you compliant is important.
During Budget announcements or changes: Significant tax changes are usually well publicised, however taking advice to understand how the changes will impact you personally gives you information to make informed decisions on whether to make changes to your affairs. This can help you avoid unexpected tax charges.
If you are getting married or divorced: In both cases this can be a busy time, and taking tax advice may be far down the priority list, but this could be a costly mistake. Both marriage and divorce can create significant changes to your tax affairs, in particular when looking at the transfer of assets between parties, and available allowances.
By taking personal UK tax advice when your circumstances change, you can save time, save money, and get peace of mind that your tax position is clear, optimised, and being looked after by a professional.
Download the key dates
To help with this we have created a set of useful reminders that you can download free directly to your calendar so that you don’t miss any deadlines and can optimise your tax position in good time. The download will place the calendar reminders below on your device along with our contact details when you need them.
2020 Dates
1 Oct Submission deadline for paper filings
15 Oct Autumn budget reminder
1 Nov Reminder to gather tax return inputs
1 Dec Deadline to select PAYE as method of tax payment in 30 days
2021 Dates
2 Jan Tax return and payment deadline in 30 days
31 Jan Tax submission and payment deadline
8 Feb Year end tax planning review
8 Mar Reminder to implement tax planning
6 Apr Start of UK tax year
1 Jun Start gathering 2020/2021 tax return inputs
1 Jul Consider if payment on account reduction is appropriate
31 Jul Deadline for payment on account