Preparing for the new financial year
Featured Products Promotional FeaturesPosted by: Dental Design 15th April 2021
How can dental practice owners prepare for the new financial year? The Budget is due on 3 March, which may contain measures that could directly impact on your business and your personal finances in 2021.
It is still a guessing game as to what the Budget will contain. But financial planning can be a positive and motivating exercise and there is still time to make a few changes before 5 April that could benefit you and help you prepare for any surprises. For example, you might want to maximise your pension contributions for 2020/21 by making a further contribution before then.
Flexible, on a solid foundation
When you look back at what you learned during 2020, “resilience” and “flexibility” will probably feature very high on that list. But it is hard to find resilience or be flexible if you do not have a solid foundation to work on.
So, make this new financial year one where you get specialist advice, especially with tax planning. Tax planning requires an expert, as they will put your unique circumstances into the wider context, to find ideas that could work for you. In the upcoming Budget, although we don’t know how he is going to do it, the cash-strapped Chancellor is going to have to start bringing more revenue in, which could mean tax rises – sooner or later.
What new tax measures could we see?
Pensions is one area where we might see change. This could be in the form of a flat rate tax relief on pension contributions – if this is the case, it is likely to be a short-term solution as the government wants to encourage people to put money into a pension and save for retirement.
There are also fears that the higher-rate pension tax relief will be scrapped, although this would alienate these taxpayers. Reducing the £40,000 annual allowance is therefore more likely. The Chancellor might decide to cap the amount of tax-free cash that you’re allowed to take out of your pension pot at age 55, or he could make private pension incomes subject to NICs. Even if none of the above are in the Budget, pensions should be a key part of your tax planning, so get in touch with a pension advisor in good time.
Changes to Capital Gains Tax (CGT) could also be on the cards, if there are no rises to the rate of Income Tax, VAT or NICs as per the government’s (pre Covid-19) election promise. CGT is next on the list, which is why it’s worth considering what impact it could have on you, as a business owner and/or higher rate taxpayer. Last November, the Office for Tax Simplification (OTS) reviewed CGT and set out policies for consideration. It suggested the system could be simplified in several ways, for example, by reducing the number of GCT rates, which might feature in the Budget.
There could also be rises in ‘green’ taxes, to underline the government’s commitment to fighting climate change. None of us have a crystal ball, but planning can mitigate some of the stress involved with running a thriving, profitable practice. So, find your expert and get them on board – specialist dental accountants Figurit know the principles of good accounting and the dental industry inside out. They can assist with tax planning and get you prepared for the year ahead.
Be ready for anything! We can guess what is likely, but we can’t predict the future. We all need to plan ahead to be in the best possible shape for whatever 2021 sends our way.
For more information, please visit https://figurit.com
or call Figurit (formerly known as Lansdell & Rose) on 020 7376 9333.
