Year End Tax Planning Guide - 2022-23

Your personal affairs, your family and business affairs, and your plans for the long term, need to be arranged as tax efficiently as possible. The period before the end of the tax year, on 5 April 2023, is the BEST time to do this. Make sure to check out our year end-tax planning guide 2022-23 – a must read, right now, to maximise the opportunities available

Year End Tax Planning Guide – Contents

Planning potential for director-shareholders
Planning potential: corporation tax (rises ahead)
Planning potential: income tax rates and allowances
Planning potential: tax and your family
Planning potential: savings and investments
Planning potential: Capital gains tax
Planning potential: Gift Aid
Year end checklist

HB-Accountants-Tax-Planning-Guide-22-23 Download

Feel free to browse our guide here or download by clicking the link above

Changes to Corporation Tax

One point to mention, from 1 April 2023, the main rate of corporation tax rises to 25%, but not every company will pay at this rate, however. Profits exceeding £250,000 will be charged at the main rate, but a small profits rate of 19% applies where profits do not exceed £50,000.

Corporation Tax – profits under £50k

Companies with profits under the £50,000 mark will effectively see no change and the small profits rate of 19% applies.

Corporation Tax – profits between £50k and £250k

If your company sits with profits between £50,000 and £250,000, the tax rate is tapered. Your company will pay at the main rate reduced by marginal relief: essentially, the tax rate increases from 19% to 25% depending on the level of profits. Limits are adjusted where there are associated companies.

Effectively, under the new rates, companies will pay tax at 26.5% on all profits between £50,000 and £250,000.

JOHN NEIGHBOUR – TAX YODA

Marginal Relief tool to calculate corporation tax

HMRC has created an online tool to demonstrate how marginal relief works: this can be accessed on gov.uk, by searching for ‘marginal relief calculator’.

Click here to access Marginal Relief calculator

Corporation Tax – profits exceeding £250k

Companies with profits exceeding the £250,000 upper level, will see corporation tax at 25% from 1st April 2023.

Director-shareholders in companies with higher levels of profits are likely to need to plan for the cash flow implications of higher corporation tax bills.

Tax Planning for 22-23 Tax Year

This year, such a review may be even more beneficial than usual. Major change to tax bands and allowances has been announced over the course of 2022.

This means some last-chance opportunities to make use of allowances at current rates and to access current tax bands. Similarly, there may be areas where you have discretion over the timing of income and it is worth establishing whether income is better taken this year or next. Here again, a review before 5 April 2023 could have a significant effect on your tax
position

As your accountants, we have the all-round vision of your circumstances that can really help make an impact. To make the tax rules work to your advantage, it’s best to start the discussion as soon as possible before 5 April 2023. Why not consider an HB Tax Clinic (reduced rate for current clients) – we look forward to being of assistance.

Please feel free to contact the team on 01992 444466. We’re accountants for business and we’re here to help you grow.

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

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