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Category Archive Tax Planning

Bymapfinancesadmin

MAP Autumn 2021 Budget Highlights

Check out our highlights of the Autumn 2021 Budget from 27th October 2021 using the reader below.

2021-Autumn-Budget

If the above reader does not display correctly, you can access the guide by clicking here.

Bydylanharper95

Work with Us

If you are an Independent Financial Adviser or tied/restricted financial adviser who wants to work in the independent sector and be able to provide clients with a full financial planning service, we would like to talk to you.

We are looking for self-employed individuals who are generating an income of £100,000 or more and want to grow their business without the continual burden of regulation and change management that impacts so heavily on advisers today.

To find out more about the opportunities to work with Money Advice & Planning, please download our Recruitment Brochure, or alternatively, contact our Business Development Manager Ian Clisby on 07788 566 547 or email ian.clisby@mapfinances.co.uk.

Bydylanharper95

What does planning actually mean?

When someone thinks of planning, they may very well imagine that this involves a lot of technical stuff that is beyond them, but I would suggest that this is where an IFA comes in.     It never ceases to amaze me how many people do not do any planning and are then surprised when they get a tax bill, and ask me IN ARREARS what I can do to make it go away.  You won’t be surprised to know that in many cases I can do very little because actions needed to have been taken BEFORE certain events. 

INCOME TAX –  you should always use the personal allowances that we all have, and the main example is husband and wife.   If for example, a husband has got all the household income taxed on him – he may very well be taxed at 40%, whereas his wife might not even be taxable at all.      If a couple actually planned things out, certain income streams could be hived off to a wife and that would then allow here to use her personal allowances of £12,500 a year.   There is also the £2,000 dividend allowance, and also the personal savings allowance of £1,000.      If one spouse is taxable at 40% and the other at 20% with room to spare, then they can save tax of 20% by moving some income from the higher rate taxpayer to the lower rate – if it is possible to move of course.  

PARTNERSHIPS – Don’t forget that if you have joint income with your spouse, this doesn’t need to be shared 50/50 – it can be shared basically how you like.   It’s not the first time I have shared this 99%/1% because one spouse is paying tax at 40% – and the other 20%.

INHERITANCE TAX –  yes I know fine well that most people don’t look at this until it is far too late, but instead of Inheritance Tax read Voluntary tax.   Given a bit of time, I can invariably get a couple’s potential tax bill down from hundreds of thousands to nil – or close to nil as is possible.     If you PLAN for IHT, you can reduce it quite considerably, and the alternative is true – because if you do nothing about it and wait until it hits you in the face, then you will pay dearly for it.    I have seen this so many times.      

All we are doing with these tips is using the allowances that have been given by HMRC – use them to the full or lose them. It’s as simple as that.

There is one of these sayings that I have seen on banners from motivational people – that says “Failure to plan is planning to fail”, and you know what – IT’S CORRECT.

Don’t wait for a disaster to happen – contact MAP now and start your planning.

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Pensions and Tax

It’s easy enough to recommend a pension to people and mention the fact that the Govt gives you tax relief on all contributions, but when it’s time to start withdrawing from your pension when you retire – they start to take it all back, and this is what a lot of people don’t take into account.

The ideal situation is to take £12,500 a year from your pension as that would mean that you don’t pay any tax at all on it. However, not a lot of people would be able to live comfortably from this, so what do you do then ? Well, there are two alternatives as follows :-

  1. When we activate a person’s pension, we invariably always extract the 25% tax free cash that is available from the pension, and if this is not needed at the time, then we put this into a savings package that can then be accessed at any time thereafter. In quite a few cases, where people need something in excess of the £12,500 a year but perhaps not that much, then we can setup a monthly withdrawal from the savings and of course this would be tax free. We have had quite a few situations of clients getting £18,000 – £20,000 a year all tax free, with £12,500 being taken form pension and the balance being taken from savings.
  2. Where the total pension needed is in excess of this, then more can be taken form the pension but any amounts in excess of £12,500 will be taxable, so you need to bear that in mind.

As you can probably imagine, there are all sorts of alternatives here especially when you take the taxable State pension into account as well, but as financial advisers, M A P can quite easily plan things out for you at commencement and then monitor them on an ongoing basis. That way, when you have got tax relief on paying into your pension, and you are minimising the amount of tax you are paying when taking it out, can make an enormous difference to the end result, and give you so much value for money – which is what we always try and do.

The last thing that you want to do is merely take out x amount every year and pay the tax WITHOUT planning, as that could cost you a great deal.

This is what I have mentioned before when discussing cash flow models – where we update them every year as you go through life. This then gives you something to work to each and every year and gives you a great deal of comfort knowing that you are looking after your money to ensure it lasts as long as possible and that the taxman doesn’t take a bigger share than is necessary.

We work closely with clients to show them what their pension can achieve, and also to reduce tax wherever possible – why don’t you let us help you.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Planning your Finances

When someone thinks of planning, they may very well imagine that this involves a lot of technical stuff that is beyond them, but I would suggest that this is where an IFA comes in. An individual can then do the framework of what he or she wants, and the IFA would then be able to fill in all the details and suggest what needs to be done and when.

It never ceases to amaze me how many people do not do any planning, and are then surprised when they get a tax bill, and ask me IN ARREARS what I can do to make it go away. You won’t be surprised to know that in many cases I can do very little because actions needed to have been taken BEFORE certain events.

If you just leave something to happen, how do you know what the end result is ? Is it going in the same direction that you were hoping. Planning starts to get things moving in the right direction, and then you can tweak things on an ongoing basis when it isn’t, but the main thing is that you keep your eyes on it and do what is necessary to steer it in the right direction.

The old saying is failure to plan is planning to fail. It’s true !!

So why don’t you sit down today and list your objectives for savings, for pensions and even life insurance, and then have a chat with your IFA to see what you need to do to try and achieve those objectives. MAP advisers are only too willing to sit down with you and your plans.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Tax Planning – April 2021

Andrew Singleton shares some considerations on tax planning, Money Advice and Planning’s network of independent financial advisers are able to assist with your tax planning needs.

SALARIES       

You may think that this is a strange one to put in for tax planning, but it is an obvious one – and sometimes we do miss the obvious. The main thing to remember about personal allowances is use it or lose it – it’s that simple, and this will apply to people who run their own companies.

In the current year we get a personal allowance of £12,570 which is the amount we can earn without paying any tax.   Now if you have you have your own company, and you or your spouse haven’t used your allowances for the year, then it is worth thinking about taking an amount of salary to use these allowances up – after all, if you don’t use them, then that means that some tax-free money has gone.   

DIVIDENDS

Same again, if you are a shareholder of your own company, then think about taking £2,000 in dividends as this would be tax-free, but please ensure that you have profits of at least this amount, as dividends should only be taken out of net profits. 

You should even look at the possibility of taking out more than £2,000 IF the company can afford it, as dividends are taxed at lower rates than income tax and they don’t have National Insurance on them either.

PENSION INCOME

If you are taking a pension income, and your fund could stand you taking out more – then if you could take out more AND it was tax-free, i.e. by taking up to £12,570 – then why not. You should always maximise the tax free element, even if you extract it and put it in the bank – at least you are not paying tax on it.   Don’t forget that this applies per person – so if you are married, then your spouse can do the same. 

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

2021 Budget Review

After a year of Covid-19 restrictions, the 2021 Budget had a lot of ground to cover. There has been considerable speculation over how the extra expense of the furlough scheme, funding the NHS and supporting those out of work would be paid for.

It was also questionable whether the current package of support for individuals and businesses could be sustained.

So what are the plans for recovering from the pandemic and rebuilding the economy? Read about the Chancellor’s budget overview in our latest publication, download it here.


If you would like to find out more information or would like to start investing today, please contact Money Advice & Planning Ltd on 0345 241 1808 or e-mail us at enquiries@mapfinances.co.uk.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

MAP Spring 2021 Budget Highlights

Check out our highlights of the Spring 2021 Budget from 3rd March 2021 using the reader below.

2021-Spring-Budget

If the above reader does not display correctly, you can access the guide by clicking here.

Bymapfinancesadmin

MAP Newsletter – Quarter 4 2020

Check out the latest financial insights for the final quarter of 2020 using the reader below.

If the above reader does not display correctly, you can access the newsletter by clicking here.

Bymapfinancesadmin

MAP Newsletter – Quarter 3 2020

Check out the latest financial insights for the third quarter of 2020 using the reader below.

If the above reader does not display correctly, you can access the newsletter by clicking here.