Happy New (financial) Year! 6th of April marks the start of U.K.’s financial year; the point of reset.
I call it “point of reset” because it is the point at which allowances used up is reset ‘NIL’ and you start the countdown again. I therefore thought it would be useful to remind you of the allowance available (in U.K.) to be utilised during the 2021/22 financial year
- Personal Savings Allowance: Interest of up to £1,000 tax free
- ISA (Cash, Innovative Finance ISAs and Stocks and Shares) – £20,000
- Junior ISA: £9000
- Lifetime ISA: £4000
- Standard Personal Allowance = £12,570
- Dividend: £2000 tax free (unless within an ISA account).
- Capital Gains Tax: on profits from sale of assets like shares, paintings and antiques worth more than £6,000, property (second home or buy-to-let): up to £12,300 is tax free (fixed until 2026)
The personal tax allowance is automatically applied through PAYE or you allow for it when completing your annual self-assessment. All the other allowances are however things you need to consciously consider in order to be tax efficient e.g. better to save/invest in an ISA and have up to £20,000 worth of dividend income, gains on shares sold, interest, etc. tax free, than to save in a standard savings account and have £1,000 interest tax free or a general investment account and have £12,300 capital gains tax allowance
Along with the reset of allowance comes Accountability! Statutory filing requirements and their deadlines are per below.
- File first accounts with companies’ house: 21 months after registering your business
- File subsequent accounts with Companies House: Nine months after the end of your financial year
- Pay Corporation Tax or tell HMRC your company isn’t liable: Nine months and one day after your corporation tax period ends
- File Company Tax Returns: 12 months after your corporation tax period ends
- File annual returns with Charity Commission: 10 months after your financial year end
- Personal Tax Returns (self – assessment): Paper filing by 31 October and online by 31 January of the following year
Important not to get caught out by missing any of these deadlines; late filings are usually accompanied by a fine (and interest on tax payable, in some cases). Let’s use our money for us and our goals and not for paying fines!
Wishing you new challenges, new opportunities, new prosperities and a thriving new financial year.