September 9, 2024
You might think that the middle of the tax year is an odd time to be thinking about reviewing your taxes. After all, there are still several months before your 23/24 tax return is due, aren’t there?
We’d like to suggest otherwise.
Doing a mid-year tax review could be a useful exercise for several reasons. For one thing, getting everything in order now could save you a lot of last-minute stress later on (and don’t forget that the deadline for sending in your 23/24 tax return is earlier if you submit a paper return by post). We are also waiting to see what changes the Budget on 30th October may bring, so it could be wise to get a clear picture of where you are at the moment.
Here are a few good reasons to book a review with your IFA, before it gets too close to Christmas and you decide to put it off until 2025!
Although a review of your tax position will primarily focus on sources of income and the various tax-free allowances and deductions that may be available to you, that’s only part of the story.
Any financial review will be more effective if it begins with you understanding your personal and financial goals, so that, together with your IFA, you can see where you are on your financial journey and highlight any potential issues.
This might mean looking at your short-term, mid-term, and long-term wants and needs to see what you have accomplished during the first part of 2024.
And if you haven’t yet written down your goals for this year, it’s not too late, and there’s no need to write off your planning until next year.
The clarity that this will give you will also help your IFA understand how best to help you.
If identifying your goals is too big a task to tackle on your own, don’t worry. A Talis IFA can talk you through the process, step by step, and help you to come up with your financial plan.
If you’re employed on a salary, you should already be paying the correct amount of PAYE income tax, and National Insurance contributions each month. Any pension contributions that you or your employer is making should be happening like clockwork, and everything should be up-to-date. But mistakes do happen, and, especially if your circumstances have changed recently – for example, a change in salary which might put you into a different tax bracket, or you’ve recently entered into a workplace pension scheme – it’s a good idea to review your recent payslips to check that everything is as it should be.
Yes, if you’ve been paying too much tax, you could get a refund. But if, for some reason, you haven’t been paying enough, it’s better to find out sooner rather than later.
Particularly important if you’re self-employed is to make sure you’re maintaining a good record-keeping system. You should be using an online accounting or bookkeeping package to keep accurate records, but you still need to keep on top of all your income, pension contributions and tax-deductible expenses to file your next tax return, and you won’t want to end up scrambling to do it in January (remember last year…?).
Have you sold any stocks at a profit this year or are you planning to? It’s always advisable to talk to your IFA before making these decisions, so they can help you plan the most tax-efficient way. Either way, talk to your IFA sooner rather than later to identify any significant capital gains tax (CGT) liabilities.
The money you are contributing to a pension pot could be helping you to save a considerable amount on tax, as well as setting you up for a comfortable retirement later. At this halfway point in the tax year, we recommend reviewing your pension contributions so far, so see how you’re doing towards your goals. We’ll look at what your pension contribution allowances are, and help you to consider whether putting more into your pension pot would be both beneficial and affordable.
Discuss your finances with an experienced IFA.
Even people with relatively straightforward finances can benefit from the advice of an IFA.
Tax laws are complex, and change frequently, and combined with changes in your personal circumstances could mean that what worked in the 2023/24 tax year might not be the most tax efficient option for 2024/25.
Perhaps your financial goals have changed, or you’ve received an inheritance, or decided to start passing on some of your wealth to the next generation. Maybe the joys of summer have prompted a proposal (or a divorce). Perhaps you have started to consider a date for retirement.
All of these changes, and many more, can have an impact on your tax position, so a mid-year review is a great way to make the most of the opportunities, and minimise the risk of a nasty surprise later on.
At Talis IFA, we recommend regular financial reviews at every stage of life. We’ll look together at your current circumstances and future goals, and recommend the solutions which best meet your needs. We will only recommend changes to your financial arrangements if this is in your best interests, and will be transparent about our fees upfront. Our advice is completely independent and objective – giving you confidence in our recommendations.
We pride ourselves on offering plain-speaking advice in plain English, helping you to navigate the financial world with greater confidence.
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