A guide to tax planning

As satisfying as it can undoubtedly be to see lots of money coming in from your many hours of hard work, it can also be rather galling if much of that money ends up getting swallowed by taxes. Careful tax planning can help you to mitigate these losses; this, in turn, can free up more money to spend on improving your business and its services. Here is a quick and largely jargon-free guide to tax planning.

So, what is tax planning?

Paying tax is something that you will always have to deal with in one way or another; Benjamin Franklin, it seems, was speaking sense when he commented that nothing is certain but death and taxes! However, you can still lower your tax burden by making use of various tax allowances permitted by the Government. Tax planning is basically just about being as clever as possible in your use of these allowances to ensure that you are paying as little tax as legally possible.

Some examples of tax allowances

Perhaps the most obvious form of tax allowance is the personal income tax allowance. This arrangement means that most individuals can earn an annual income of up to £10,600 before they are liable to pay any income tax. Income tax is payable on 20% of the takings above this level, and this rate can rise up to 45% as earnings become higher.

There are also exemptions to capital gains tax, which is payable on the profitable sales of qualifying assets. It’s easy to avoid paying this tax in full, especially because some key assets, like your main residence and your car, are exempt.

You don’t have to look far for extra help

Sometimes, however, it can take an expert eye to spot a brilliant tax planning strategy. There are various companies that you could consider turning to – whether you feel utterly clueless about how to put together a good tax plan, or are wondering how you could make what already looks like an effective tax plan even better.

For example, Associate Services could take account of your unique needs and preferences as it draws up a highly tailored tax strategy especially for you. It’s a company with thorough experience of working for high net-worth individuals and business owners. You could also consider Oury Clark, which provides a lengthy list of useful tax allowances and tax planning ideas on its website for anyone to read.