Tax could be one of your biggest single costs. So it is not surprising that tax planning is one of the key aspects of formulating a financial plan. There is often a considerable amount that can be done to reduce the impact of taxation. The main types of tax are:
Tax on your earnings can have a major impact in the form of income tax and national insurance contributions as well as the corporation tax levied on a company’s profits. Planning can be very effective encompassing such areas as pensions and employee benefits and the use of alternative methods of drawing profits from your company.
Tax on your investments can erode a high proportion of your income and gains. Tax should not be the main driver of investment strategy, but planning can make a considerable different to our after-tax returns.
Tax on your estate can take up to 40% over and above the nil rate band. It was perhaps excessively harsh of a previous Chancellor of the Exchequer to describe inheritance tax as a levy on people who disliked their families even more than they disliked Her Majesty's Revenue & Customs (HMRC). Nevertheless, the scope for effective and totally legal tax planning is very considerable.
If you need access to accountants who specialise in tax planning, we would be pleased to make a recommendation.