Accountants and tax advisers try every year to remind people to: plan ahead in advance of the next 12 months; review their tax affairs before the end of the tax year; and to submit their return early.
Unfortunately, there seems to be a general reluctance to follow this advice – probably because there’s a misconception that tax planning is an added cost with no guarantee of benefits.
However, it’s important to emphasise that tax planning doesn’t need to be long-winded – or expensive.
It’s normally a simple tax health check to make sure that there are no unexpected or significant tax consequences to what you are doing or planning to do.
It’s also important to remember that you can’t plan tax retrospectively. Even most seemingly innocuous transactions can have adverse and inadvertent tax consequences.
So in the interests of risk avoidance and forward planning, here are a few practical recommendations for all taxpayers.
Firstly, just to re-emphasise – plan in advance. You may need preparatory work before any planned transactions in order for them to be tax efficient.
And so you can get your next year planned properly, review your current year tax position well before the end of it.
You may be able to take actions which will help you minimise your burden. Also, submit your tax return as soon as possible – that way you can plan ahead for any tax liability as well as potentially reducing HMRC’s window of opportunity to review your tax return.
Second, for planning advice please do not use Google or any other search engine, the press or someone down the pub.
You may come across the right answer to your problems but it’s unlikely. Tax law and its interpretation can be complex and you can’t alter what’s been done in retrospect if you’ve acted on incorrect or incomplete advice. If things sound too good to be true, they usually are.
Next, we recommend reading up from an authoritative guide, for example the Haines Watts tax planning guide, which will help you understand forthcoming changes in tax law and help you form future plans.
If you do receive professional advice, read it carefully. While the immediate focus is probably on tax payable, there’s usually advice in there about other matters which might impact your particular circumstances.
Finally, if in doubt… pick up the phone. You’ll be surprised how a five-minute conversation with your accountant or tax adviser (preferably in advance) may either reassure you that there are no issues ahead or highlight the need for careful planning.
How can Haines Watts help?
We advise clients with a broad range of tax and compliance matters throughout the South West region. If you would like to have a conversation, please get in touch with your usual Haines Watts contact.
