Tax Year End Reminder

With all that is currently going on, it has been easy to forget that the tax year ends next Sunday (05/04/2020), this means that Friday the 3rd April is the very last day for companies to have received the monies for this tax year.

We are aware that some people may be put off investing money during this volatile time and we can therefore invest the money in cash and await further instruction at a later date to invest into funds. Let us remind you of some of the reliefs you may miss out on if you do not invest before then.

2019/20 Personal Pension

The annual allowance for 2019/20 is £40,000 per person although you could have more than this if you use carry forward from previous year or less than this if you earn over £110,000 per annum. We will confirm the maximum you can contribute if you contact us and go through a few simple questions. Below are some reasons to invest in a pension:

• Tax Relief – Your contributions receive 20% gross tax relief meaning that £800 is turned into £1,000, £24,000 is turned into £30,000 and so on. For higher rate taxpayers (those earning above £50,000) or additional rate tax payers (those earning above £150,000) they can claim a further 20% and 25% tax relief respectively on their tax return. For those earning between £100,000 and £125,000 it is possible to get up to 60% tax relief.
• Growth – Give your money the potential for growth through investing in funds.
• Tax efficient – You pay no tax on UK income or capital gains from your investments inside your ISA.
• Child Benefit – For those earning above £50,000 and facing a child benefit tax charge, it is possible to make a pension contribution that brings you below the limit and therefore not liable to the charge.

2019/20 Individual Savings Account (ISA)

The allowance for 2019/20 is £20,000 per person. If you do not use up your allowance before next Friday, then this will be lost. Below are the reasons to invest in an ISA:

• Tax efficient – pay no tax on UK income or capital gains from your investments inside your ISA.
• Growth- give your money the potential for growth through investing in funds.
• Simple – no need to declare ISAs on your tax return.
• Accessibility – You can access the money inside your ISA at any time

2019/20 Junior ISA (JISA)

The allowance for 2019/20 is £4,368 per child under the age of 18. The allowance will move to £9,000 for the tax year 2020/21. If you do not use up your child’s allowance before then it will be lost. Below are the reasons to invest in an ISA:

• Tax efficient – pay no tax on UK income or capital gains from your investments inside your ISA.
• Growth- give your money the potential for growth through investing in funds.
• Simple – no need to declare ISAs on your tax return.
• Accessibility – You can access the money inside your ISA at any time.
• Child has no access to funds until 18 although can manage the fund from age 16.
• The money is held separately from the parent’s estate

Please contact Willis Wealth Management if you would like any more information or to make a contribution before the end of this tax year.