Finance
Tricia Halliday of Martin Aitken & Co Chartered Accountants describes how to manage tax in the new financial year
New tax year, new opportunities
T
he new tax year started on 6 April and it brings with it opportunities for tax planning.
Here are some...
Capital Allowances Annual Investment Allowance The Capital Allowances Annual Investment Allowance (AIA) was increased to £250,000 from 1 January 2013, for a two-year period. This offers a tax write off against plant and machinery such as washer disinfectors and dental compressors. Normally, capital allowances
can only be claimed at 18 per cent on plant and machinery, but the AIA offers a 100 per cent tax write off on qualifying expenditure every year. If cash is available, now’s a good time to think about replacing or upgrading your IT, dental equipment and any other quali- fying assets. A word of caution though –
where the accounting period of your business does not begin on 1 January (i.e. coterminous with the start date of the AIA uplift), the calculation of the AIA is somewhat convoluted and timing of expenditure can be critical to maximise allowances. Before making purchases, you should discuss the matter with your tax advisor.
Pension contributions relief Pension contributions are a tax-efficient way of providing for your retirement. They attract income tax relief and
any unused allowances in the previous three tax years can be used in the current tax year. It is possible to invest up to
£200,000 in a private pension plan before 6 April 2014. When considering pension contribu- tions, it is important to bear in mind the personal pension annual allowance currently £50,000 pa (reducing to £40,000 pa from 6 April 2014) and the lifetime allowance currently £1.5 million (reducing to £1.25m from 6 April 2014). Any calculations must take
into account your NHS pension contributions. It may be worth speaking to your pensions advisor to see how much you can invest in a private pension scheme before 6 April 2014.
Real Time Information On 6 April, Real Time Informa- tion (RTI) came into operation for most employers. RTI has
been introduced for a number of reasons. The current PAYE system cannot keep up with the fluidity of many working people’s lives – many people now have more than one job or may take on casual work as well as their main employment. RTI also promises to deliver
the required data for the universal credits system. RTI has changed the face
of payroll reporting and represents a huge burden for employers. The roll out has been far from smooth and not helped by glitches in HM Revenue & Custom’s RTI soft- ware used by many employers. If you are experiencing prob- lems with RTI you should seek professional assistance as soon as possible.
Inheritance Tax Inheritance Tax (IHT) is a tax levied on the value of your
estate at the date of death. It also reels in any gifts made in the seven years prior to death. The government announced a freeze on IHT nil rate band, currently £325,000, until 5 April 2018. Now may be a good time to
conduct some estate planning and satisfy yourself that your practice qualifies for Busi- ness Property Relief and the accompanying 40 per cent tax relief. (see Dec 12/Jan 13 issue of Scottish Dental magazine, page 75, ‘Avoid the tax traps’).
National Insurance One of the coalition’s major drives is to reduce red tape and reduce the amount of time spent on compliance. In support of this, and to simplify tax and boost employment, the Chancellor introduced an annual allowance for employer National Insurance Contribu- tions (NICs). This modest NIC break (£2,000) will reduce the costs of employing staff in your practice. You will, however, have to
wait until April 2014 to access the new allowance. The imple- mentation process is still subject to consultation so we will update you once we know the exact details.
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Should you have any queries in respect of the information contained in this article, please contact Tricia Halliday at Martin Aitken & Co on 0141 272 0000.
Scottish Dental magazine 59
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