Introduction
Effective tax planning is essential for every business and individual. With the new tax year upon us, it's the perfect time to review your financial affairs and ensure you're making the most of the available allowances and reliefs.
1. Personal Allowance
The Personal Allowance remains at £12,570 for the 2024/25 tax year. This is the amount of income you can earn before you start paying Income Tax.
2. Dividend Allowance
The Dividend Allowance has been reduced to £500. This means you can only earn £500 in dividends tax-free, down from previous years.
3. ISA Allowances
The total annual ISA subscription limit remains at £20,000. Utilizing your ISA allowance is a tax-efficient way to save or invest for the future.
4. Pension Contributions
Pension contributions remain one of the most tax-efficient ways to save for retirement. You can receive tax relief on contributions up to 100% of your earnings or the annual allowance, whichever is lower.
Conclusion
Tax rules are complex and subject to change. This guide provides a general overview, but we strongly recommend seeking professional advice tailored to your specific circumstances.