KALA ATKINSON'S 12 DAYS OF TAXMAS
As the festive season approaches, we at Kala Atkinson know that the tax return deadline of 31 January 2021 is on the horizon.
With this in mind, we have prepared a 12 days of Christmas list of top tips for individuals preparing their self-assessment tax return. We will be releasing these in the days before Christmas.
Income tax Personal Allowances 'in a pear tree'
The 19/20 & 20/21 income tax allowance for individuals is £12,500 (18/19 £11,850). This is the amount by which an individual can earn without paying any income tax. Make sure this allowance is being used to its maximum!
If you run a small business and your spouse doesn't earn any income, make sure to make use of their personal allowances too!
More importantly, if you earn over £100k during the year you will lose the right to your personal allowance. For each £2 you earn over £100k you will lose £1 of personal allowance. In 19/20 you will lose all your personal allowance if you earn over £125k. If possible, plan your income accordingly.
Similarly, there are also capital gains allowances (£12,300 in 20/21) which are separate to your income tax allowances, these can also be utilised in your tax planning.
If you have any questions, be sure to contact us today to find out how we can help.
Don't forget the self assessment tax return deadline is 31 January 2020 - file before then to avoid a late filing fee of £100.