How tax efficient are you?

Retain more hard-earned money in your back pocket

Who knew there were so many taxes to be aware of – income tax, National Insurance contributions, inheritance tax, VAT, capital gains tax, stamp duty, land tax – and that’s only for individuals.

Registered companies also have to factor in corporation tax and PAYE. In fact, it’s estimated that there are over 100 taxes in the UK!

Efficient tax planning comprises three key methods to defer, deduct and divide. Each method can help to reduce the amount of tax due on wages, tangible assets, acquisitions, profits and estates.

Couple doing spome tax planning with female sitting on books with laptop and male looking at graph
Woman doing financial planning

Tax planning with pensions

There are many ways to manage tax affairs efficiently to legitimately reduce the amount you need to contribute, as an individual and a business.

Pensions are an exceptionally tax efficient way of saving, but many employees and business owners do not maximise the potential.

Once a pension comes out of an estate and is paid to a beneficiary the tax benefits are lost. A pension does not need to pay out if the nomination is set up correctly therefore the tax benefits are retained.

Man looking at paperwork to plan for children's futures

Offset corporation tax with a personal pension

Did you know that as a business owner you can use your pension to reduce your company and personal tax bill? Balancing the right level of payments can benefit both the business and your personal back pocket.

Talking to a professional financial advisor will help you to understand the best tax planning strategies to ensure you keep more of your money.

To trust a financial advisor with your pension pot is a big decision. However, Rebecca has definitely stepped up to the mark with sound, unencumbered financial advice.

Alan Rogers
Woman reading financial newspaper

Getting tax savvy

Claiming for expenses and being shrewd about tax deductions and credits will always reduce the amount of tax you need to pay – you just need to know where to begin.

Not all income is taxed equally and there are ways to convert certain income types into other types that are subject to lower tax rates. There are also ways to reduce your personal annual income to avoid falling into the higher band for income tax on earnings.

To aid cash flow there are legitimate ways to defer some tax payments into the following financial year to help ease the blow for individuals as well as companies.

Whatever your economic situation, efficient tax savings can always be made following a thorough financial review.

Talk to Willow Financial Solutions about the best way to get to grips with your tax planning.

Get in touch