Tax planning for businesses
Capital allowance:
If your business invests in equipment, vehicles, or machinery, you may be eligible for tax relief under the Annual Investment Allowance (AIA). This allows a 100% write-off on qualifying expenditure up to £1 million in a 12-month period. New zero-emission vehicles also qualify for special 100% tax relief. Reviewing your purchases before the tax year-end can help you make the most of these deductions.
Pension contributions:
Making contributions to employee or director pensions before the tax deadline can lower your taxable profits and support staff retention. For directors of limited companies, pension contributions can be an effective way to extract profit from the business while reducing Corporation Tax.
Research & Development (R&D) tax relief:
If your company is involved in innovation, you may qualify for R&D tax credits. These allow businesses to claim relief on costs related to research and development activities. Identifying eligible expenses and submitting a claim before the deadline could lead to significant tax savings. Learn about our R&D Tax service here.
Double-cab pickup vehicles (upcoming tax changes):
From April 2025, HMRC will classify double-cab pickups (DCPUs) as cars rather than goods vehicles, affecting capital allowances and benefit-in-kind calculations. If you're considering purchasing a DCPU, doing so before 6th April 2025 could secure more favourable tax treatment. To benefit from capital allowances, contracts should be entered into before 1st April 2025. Read more details in our recent Double Cab Pickups blog.
Tax planning for individuals
Employment expenses:
You can claim Income Tax relief on employment expenses that haven’t been reimbursed by your employer, such as:
- Working from home (if required by your contract).
- Repairing or replacing uniforms or small tools.
- Business travel expenses (excluding commuting).
- Professional fees and subscriptions.
For employees who don’t file a self-assessment tax return, claims can be made using the online P87 form. Be sure to keep evidence of expenses incurred.
Savings – maximise your ISA allowance:
For the 2024/25 tax year, individuals can contribute up to £20,000 into an ISA, with tax-free interest and growth. If you're between 18 and 40, you may also consider a Lifetime ISA (LISA), which allows contributions of up to £4,000 per year with a 25% government bonus, helping you save for your first home or retirement.
Pension planning:
Boosting pension contributions before 5 April 2025 can maximise tax relief.
- The government provides 20% tax relief on contributions, meaning a £4,000 contribution costs just £3,200 after relief.
- Higher-rate taxpayers can claim an additional 20% or 25% tax relief.
- If your income exceeds £100,000, pension contributions can help reduce taxable income and preserve your £12,570 personal allowance, effectively giving 60% tax relief.
Capital Gains Tax (CGT) planning:
The CGT annual exemption for 2024/25 is £3,000. If you haven't used your allowance, consider selling assets before 6 April 2025 to utilise it. Spouses and civil partners can transfer assets to maximise their exemptions.
Voluntary National Insurance Contributions (NICs):
To qualify for a full state pension, you need 35 qualifying years of NICs. If you have gaps in your record, you can make Class 3 voluntary NIC payments. An easement allowing payments for gaps back to 2006 expires on 5th April 2025, so consider acting before this deadline.
Stamp Duty Land Tax (SDLT) changes:
From 1st April 2025, SDLT nil-rate thresholds will revert to lower levels.
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First-time buyers | £425,000 | £300,000 | |||
Single residential property | £250,000 | £125,000 |
If you're planning to buy property, completing your purchase before April 2025 could save you thousands in tax. Read more on Gov.uk.
Furnished Holiday Lettings (FHL) changes:
From 6th April 2025, FHL status will be abolished, ending beneficial tax treatment for these properties. If you own an FHL:
- Consider ceasing the trade before April 2025 to preserve eligibility for Business Asset Disposal Relief.
- Accelerate renovation expenses before the deadline to claim capital allowances under current rules.
Read the full details in our Furnished Holiday Lettings blog here.
Plan ahead and make the most of available tax reliefs
Reviewing your financial position now could help you take advantage of valuable reliefs and allowances. If you’d like tailored tax planning advice, get in touch with us to arrange a call, by contacting our friendly and helpful corporate and personal tax team at LWA.
You can get in touch with our Manchester office on 0161 905 1801 or our Warrington team on 01925 830 830, or email us to mail@lwaltd.com.