Time to start your year-end tax planning

clock - year -end tax planning The RU Group

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Now is the time to start your year-end tax planning. The first months of a new year are traditionally a time of reflection, and that includes taking the opportunity to review your tax planning too.

The date for the next budget has been set by the Chancellor, Sajid Javid, as 11 March 2020.

When it comes, as the first budget following an election, it could potentially include some unwelcome measures. History (and the Institute for Fiscal Studies) show that Chancellors of all hues prefer to start off with the financial ‘medicine’ and save the sweeteners until nearer the next visit to the polls.

The budget could potentially include measures that increase taxation, or at the very least reduce opportunities for tax-efficient savings and investments.

It therefore makes sense to begin thinking about some tax year-end planning before the next budget arrives.

Among the areas to consider are:

Pension contributions

The complex rules on tax relief for pension contributions forced the previous government into last-minute sticking plaster action to prevent NHS consultants refusing to work overtime. Whatever long-term solution is eventually found, it seems improbable that it will involve granting more tax relief. That might mean restricting relief to a flat rate, an idea that has been regularly floated. If you are a higher rate taxpayer, such a change would not be good news.

Capital gains tax

The relative tax treatment of capital gains and income has been highlighted by several parties during the election campaign. The current regime, with an annual exemption of £12,000 and a maximum tax rate of just 20% (other than for residential property and carried interest) is generous. If you have not yet used your 2019/20 annual exemption, doing so sooner rather than later seems a sensible course of action.


A few years ago there was talk of capping ISA contributions. With ISAs now costing over £3bn in lost income tax according to the latest HMRC figures, such Treasury brainstorming could reappear. Again, if you have not topped up your 2019/20 contributions, now is the time to act.

Year-end tax planning

Whilst the content of the next budget is currently educated guess-work, it is always worthwhile reviewing your tax planning on a regular basis. If you’d like to discuss your savings and investments please get in touch with us as soon as possible, and definitely before the next budget lands.  

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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