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End Of Year Tax Planning

How to make use of your annual tax-free allowances.

The Mayan calendar predicted the end of the world that date came and passed in December; however there is one other crucial date that is fast approaching. It may not be the end of the world, but keep an eye out for the end of the Tax Year. There is not much time to use your annual tax-free allowances. Two ways to make the most of your allowances are to invest into ISAs and Pensions.

ISAs: ISAs are tax-efficient wrappers where your money can grow out of the reach of the taxman. However, you cannot use your ISA allowance for 2012/13 after 5 April 2013. The maximum allowable investment in an ISA for 2012/13 is £ 11,280 (maximum into a Cash ISA - £ 5,640). The limit for payment into a Junior ISA (JISA) is currently £ 3,600. Children who have a Child Trust Fund will not be eligible for a JISA.

Pensions: For a basic rate tax payer contributing £ 80 into their pension, the government will pay an extra £20; higher rate taxpayers can claim a further £ 20 through their tax return. The maximum annual tax relievable amount you can contribute to a pension, is 100% of your earnings (up to a maximum of £ 50,000) or £ 3,600, whichever is greater, with some minor exceptions. Not a tax payer? You can pay £ 2,880 a year into a pension and the government will top this up to £ 3,600.

For further information/advice please contact Ward Williams on 01932 830664 or visit

Ward Williams

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