Rajiv Mehta | 21st December 2023 | 5 min read
Another year almost gone and as we bid farewell to the twists and turns of this eventful year, Financial Angels extends our heartfelt gratitude for allowing us to be your trusted companions on the financial journey. Your money, your rules, and our expertise!
Let us take a moment to reflect on the highs and lows, celebrate victories and take a moment to reflect. This article serves as a guide for both UK and US residents, outlining some key tax considerations that you should be au fait with.
- Tax-Free Allowances: A Festive Gift Bag for Your Finances
As Santa has his gift bag, you have your tax-free allowances! In the UK, make sure to maximize personal allowances and explore the benefits of Individual Savings Accounts (ISAs). Similarly, in the US, leverage tax-free accounts like Roth IRAs or take advantage of deductions available in traditional IRAs. These allowances act as the festive gifts your finances deserve, providing opportunities to save and invest tax-efficiently.
- Business Expenses: Unwrapping Savings for Business Owners
For business owners on both sides of the Atlantic, consider festive expenses as little helpers for your bottom line. In the UK, staff Christmas parties are not only a festive necessity but also a deductible expense for your business. In the US, explore qualified business expenses that can contribute to lowering your taxable income. Whether it is spreading holiday cheer or investing in your business, these expenses can be strategic financial moves.
Mr Hunt in the UK has announced tax clawback on investment by businesses, so do not forget to look at our website and understand these new tax breaks.
- Sweetening Your Pension Contributions
Just like a good mince pie needs the right ingredients, your pension could use a boost. In the UK, contribute to your pension before the year's end to take advantage of potential tax benefits. In the US, consider maximizing contributions to retirement accounts like 401(k)s or IRAs. These contributions not only enhance your financial security but also offer tax advantages that sweeten the deal for your overall financial well-being.
- Staff Christmas Parties: Spreading Joy and Staying Tax Compliant
In both the UK and the US, hosting staff Christmas parties is a wonderful way to spread joy and build team camaraderie. However, it is essential to be mindful of tax regulations. In the UK, ensure these parties are annual, open to all employees, and cost less than £150 per person to qualify for tax exemptions. In the US, consider the tax implications of such events and explore potential deductions to make the festivities tax-efficient for your business.
- UK company Tax Changes for all March Year ends
In November 2023 Mr Hunt confirmed the changes in corporation tax rules and that a company's tax rate and timing are contingent on both profits and the number of associated companies. Standalone companies with profits exceeding £250,000 face a new main rate of 25%, while those below £50,000 adhere to the old 19% rate. For profits between £50,000 and £250,000, a 25% rate applies with marginal relief. Associated companies, now defined by control relationships, impact tax rates based on their numbers. Additionally, the Quarterly Instalment Payments (QIPs) regime considers large companies with profits over £1.5m, adjusting thresholds for associated companies, leading to potential cash flow impacts and necessitating strategic entity consolidation.
- Bah Humbug! Personal Tax Returns Deadline Reminder
Do not let the tax season be a "Bah Humbug" moment. For UK tax residents, if you have not filed your personal tax return, the 31st of January is approaching fast. Ensure you sort out your personal tax matters before the deadline to avoid penalties and unnecessary stress. In the US, stay aware of the tax filing deadlines and take timely action to fulfil your obligations.
As we eagerly anticipate the new year, Financial Angels remains at your service, ready for friendly chats, valuable advice, or simply to share our thoughts on your financial ventures.
In the spirit of the season, we extend our warmest wishes for a holiday season filled with joy, laughter, and a New Year that sparkles with promise. Merry Christmas and a Happy New Year to you and yours!
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