Personal Tax Planning
Most earnings are taxed; from employment income, pension, property income and interest on savings. Some income is not taxed such as ISAs or premium bonds. You are responsible for accounting for your income to HMRC, with penalties for inaccuracies or false accounting.
Capital Gains Tax
CGT is paid when you sell an asset. It is paid on the increase in value from the date that you bought the asset. You have an annual tax-free exemption (£11,100 for 2015/16). Some assets, for example your home are exempt from this tax. Losses made on investments when sold can be used against any future gains.
This tax is paid when you die, and in some cases even before that. If your estate is valued at more than £325,000 (£650,000 for a joint state) then you may be liable to inheritance tax at 40% of the excess. Legislation is proposed to give an additional relief on £175,000 of the value of your home. You can reduce the amount you may be liable to pay by careful planning, but time needs to be given as some of this planning to take effect.
Running a business is complex and time-consuming. We are always better at running the business than we know, and it is always sensible to use an accountant to produce your annual returns, which may not be an expertise that you hold. An accountant will help you with accuracy, knowing what is allowable and especially with punctuality. This could reduce your tax take. An accountant will also keep up-to-date with tax changes and any opportunities that appear, for example savings and potential pitfalls. Many factors can affect the tax that you may be asked to pay including business loans and mortgages, company pensions, employee benefits, insurance, cars, wages and so on.