It’s not long until the end of the tax year and those who take time to plan ahead can legitimately take steps to minimise their tax bills. But plans take time to implement, writes Adam Bernstein
It’s well known that tax law is unclear if not impenetrable. What is less well known is how much it’s grown in recent years. In 2009, UK tax law stood at 11,520 pages. By 2016 however, it comprised around 21,000 pages. With some 10 million words, it’s 12.5 times the number in the Bible and 12 times that in the complete works of Shakespeare. In comparison, Hong Kong’s tax law stretches to a miserly 276 pages and just 150,000 words.
Of course, forward tax planning might not be at the front of your mind right now but the end of the 2018/19 tax year, 5 April 2019, is just around the corner and there are steps you can take to lower your tax bill. Yen-Pei Chen, Corporate Reporting and Tax Manager at the ACCA, an accounting body, offers readers advice.
Income Tax
Starting first with Income Tax, Chen says to watch out if you’re approaching a tax threshold or find yourself in a marginal relief band. She points out the thresholds for the 2018/2019 tax year that you need to be aware of. Breach any and you’ll pay more tax:
- Higher rate income tax band. Anything over £46,350 is taxed at 40%;
- High income child benefit charge threshold, which means that child benefit begins to be clawed back once income exceeds £50,000;
- Personal allowance reduction threshold is where the personal allowance of £11,850 is reduced by £1 for every £2 above £100,000; and
- Additional rate income tax band where income above £150,001 is taxed at 45%.
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