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Last Minute Tax Planning for 17-18 Tax Year

The end of the tax year is rapidly approaching and will be here before you know it, but there are still plenty of ways for doctors and dentists to save tax before 5 April. It’s important to maximise your savings before the year ends so you can plan and save accordingly and you don’t get hit with a tax bill you’re not prepared for. A financial advisor will be crucial for your short term planning and long term tax needs.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice. 

Pension savings

The first thing you can do to maximise tax savings is increase your tax threshold by contributing to a private pension plan. This option is especially great for doctors and dentists since many individuals find themselves in a higher tax rate or at least very close to a higher rate.

The allowance may decrease for earners above a determined limit or if they have withdrawn benefits before. By utilising your full allowable contribution of £40,000 this year, you’ll be able to use “carry forward” to apply unused allowances from the past three years. Self-employed doctors and dentists benefit greatly since income may vary year on year.

ISA contributions

Additionally, you should use your full £20,000 individual (or £40,000 for a couple) ISA savings allowance since you cannot roll over any unused portion to the following year. You don’t need to declare your contributions on your tax return, there is no Capital Gains Tax (CGT), and no tax on UK income.

There are also other ISA programmes to which you can contribute. You may save up to £4,128 each tax year with a Junior ISA (JISA), a tax-efficient way to start a savings pot for a child. There’s also a Lifetime ISA (LISA) available to individuals under 40. You can contribute up to £4,000 annually, plus you get a 25% bonus to your savings, courtesy of the government, up to a maximum of £1,000 per year.

Other ways to save

Along with pension savings and ISA contributions, there are other tax relief options available to business and property owners.

  • Claim all your rental property expenses to increase your tax relief.
  • Take advantage of the £11,300 Capital Gains Tax allowance and tax efficient investments.
  • Ensure you’re using the new ‘residence nil-rate band’ (RNRB).
  • Be charitable – your annual allowance for small gifts lets you give up to £3,000 a year, which is automatically exempt from IHT and if unused, it can be carried forward for one tax year.

Additionally, you can lower your total income tax liability by partnering with your spouse. If they are a low-earner or even non-taxpayer and you have the bulk of the savings or income producing assets such as a buy-to-let property, you can transfer some of these assets to their name.

Work with professionals

The best way to save the most tax this year is to work with specialists such as accountants and financial advisors as they have the knowledge and experience to help with last minute tax planning.

Dental and Medical Financial Services is proud to present a comprehensive guide for year end tax planning, but we’re also here to offer advice tailored to your specific situation and needs. Get in touch today.

Tax planning is important to save money

Dental & Medical Financial Services have been helping doctors and dentists with effective tax planning for over 25 years. Call Darren to discuss your options.

Tel: 01403 780 770


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