Smart Tax-Saving Tips for a Financially Savvy Summer

OK, we get it - tax might not be the highest priority on your list when school’s out, the holidays are right around the corner and the weather is finally decent. But the summer is the perfect time to take a breather and work out if you’re making the most of any available allowances and reliefs, as it’s still nice and early in the tax year.

With that in mind, here’s a checklist to go through to make sure you’re saving on tax so you can relax on your summer break and set yourself up for success for the rest of the tax year.

Do a summer clear-out of the accounts

The summertime is when life and business gets a little quieter - so it’s a good time to check everything’s in order in your personal or business accounts. Some of the practices you could do is to go through those old receipts and get your ducks in a row with your allowable expenses, which can really add up to substantial savings when tax season arrives.

Having a quick check over the budget now, relatively early into the current tax year, is also a good time to correct course if there are any errors. Consider this the season to not only soak up the sun, but also to streamline your financial health.

Review your personal allowance

For the tax year 2023-24, the personal allowance is set at £12,570, which can be shared between spouses or civil partners. If your spouse’s income is below the personal allowance threshold, you can transfer savings, rental income or dividends from shares to help share the tax burden.

If you’re a freelancer and you have an idea of what work you’ll have coming in, you can plan your invoicing and new work around your personal allowance each year. Everyone’s tax situation and personal allowance is unique, so it’s well worth talking to a professional about how you can best take advantage of it.

Catch the capital gains wave

Did you know that while you have to pay capital gains tax on an asset that’s gained in value, like a second property, there’s a tax-free allowance you can claim? For the current tax year, it’s £12,300, so using the summertime to think about the best timing for selling your assets can pay off in spades.

Then there are certain assets that are CGT-free, like ISAs and Personal Equity Plans. Making a strategy to max these out can help you to save tax in the long run. A bit of planning now can help you enjoy a bountiful harvest when the season for selling your assets arrives.

Sizzling AIA savings

For the business owners out there, considering tax-saving strategies when business is quiet can mean you’re quids in for years to come. The Annual Investment Allowance (AIA) lets companies essentially reduce their taxable profit by the full value of the qualifying purchase.

This year’s Budget saw the Chancellor introduce 100% capital allowances on new plant and machinery purchases until 31st March 2026, so this summer presents an opportunity to plan out how your business can best benefit from the generous allowance.

If you’ve already got a plan in place, using the summertime to go over all qualifying expenditure so far can be a massive help when it’s crunch time during tax season. It's these quiet moments that often lead to the most valuable insights, helping you make the most of the AIA and secure a financially sunny future for your business.

Get your taxes done early

Paper tax returns are due by the 31st October and online returns must be completed by the 31st January, but it’s never too early to think about getting it sorted sooner rather than later. There are two benefits to getting your taxes done early - the first is that you can definitely be sure you won’t face any late penalties for a late return.

The second is that you might be able to benefit from any early bird rates that your accountant offers, so you can save money at the same time. Winner! Besides, who doesn’t like ticking off a big task like the tax return ahead of a nice relaxing holiday - so why not ride the wave of efficiency and savour the summer of smooth tax handling?

Wrapping up

The tranquillity that summer brings can provide a great environment for setting a solid foundation for the rest of the tax year, ensuring that when tax season comes, it will be a breeze rather than a storm.

So, while enjoying the sunshine and clear skies, ensure to give your finances the attention they deserve – it's one of the most productive ways to spend these long summer days.

If your tax affairs are heating up and leaving you hot under the collar, don't sweat it - book a call with us today.