The end of January brings two exciting deadlines. There is the closing of the football transfer window and the deadline for filing your self-assessment tax return.
There is not much you can do about who your team buys or sells once the window closes, but there is plenty you can do about your tax once your return is filed.
HMRC data for the 2016/2017 tax year showed 4.8m people filed their tax return in January 2018, 44.8% of the total, while 758,707 completed it on the last day.
Your tax return for the 2017/2018 tax year will have already been done and dusted, but you can start taking action now to reduce your tax liability for 2018/2019.
How to reduce your tax bill
February usually marks the beginning of ISA season as banks, building society and other investment providers look to encourage people to make use of their tax-free allowance, £20,000 for the 2018/2019, tax year.
This will help shield some of your income in a tax wrapper and reduce the amount you have to pay the taxman come January 2020.
There are two main types of ISA. A cash ISA pays a fixed rate over a defined period, or you could make your money work harder on the markets through a stock and shares ISA, which is seen as a bit more risky but has the potential for higher returns by investing in funds or shares backing the fortunes of companies or other assets.
These aren’t the only options. You could back peer-to-peer loans through an Innovative Finance ISA or save for a mortgage deposit tax-free with a Help to Buy or Lifetime ISA.
You have until the end of the tax year on April 5th to make use of your ISA allowance. It can’t be carried over so it is a case of use it or lose it.
A financial adviser can help get your saving and investing strategy correct so you make the best of your money and ensuring you are spreading risk and reducing your tax liability.
- The value of an investment and any income from it can fall as well as rise and you may not get back the original amount invested.
- Past performance is not a reliable indicator of future performance and should not be relied upon.
- HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen