Monday Musings 08/03/2021
Have you used your ISA allowance 2020 to 2021?
This week I want to talk about distractions, understandably we have been distracted trying to work out whether Rich Rishi’s budget has been good or bad for us personally. In truth for most of us the budget has been neutral. The biggest tax rise has been to corporation tax. As most of us do not own Ltd companies we have escaped this one completely, those of us who do run them, I am one, we probably will not make sufficient profits to pay the full 25% and many of us will be under the £50,000 benchmark so won’t suffer any increase. For those of you who are on a salary there is a possibility that wage inflation will move you into tax for the first time or even to a higher rate of tax. In truth, at the risk of sounding pompous, if you are earning more than the average why shouldn’t you pay a little more.
All of this has distracted us from the tax planning opportunities that are already there and must be used by April 5th
Have you used your ISA allowance 2020 to 2021 -, £20,000. Have you used your Capital gains tax allowance, £12,300. Have you maximised your pension contributions, £40,000?
If not, why not? You probably have cash sat in cash accounts earning virtually no money, in fact allowing for inflation probably losing money. Where is the logic in leaving it there when you could have it in an ISA, preferably a stocks and shares ISA depending on the level of risk you are prepared to take.
When was the last time you used you Capital Gains Tax allowance, perhaps in conjunction with your ISA allowance? This is called bed and ISA. I know that great jargon, get in touch with your adviser and ask, if you haven’t got an adviser give me a call and I will explain all.
And then the big one, especially if you run your own business. Question PAY TAX or put it in your PENSION. Answers in not more than 2000 words or call me to discuss.
Alternatively get distracted by stuff and miss the tax breaks for another year.
So, to the markets