Tax Planning – March 2015
This is the time of year when financial advisers really earn their fees. In the run-up to the end of the tax year, advisers must work hard to make sure that their clients have made the best use of their allowances before they lose them as the new tax year beckons.
While many advisers might have been pondering the radical changes at the start of the new tax year with pension reform, their bread and butter is ensuring that conventional tax planning has been done in time.
For many, this will simply mean ensuring that everyone has used their Isa allowances, but this may involve researching funds and charges and checking clients’ other taxable income. But there are now so many tax-efficient vehicles in which to invest, and a raft of tax reliefs that encourage investment or allow a certain amount of tax-free capital gain, that working through every client’s case is challenging, to say the least.
Tax planning this year follows in the wake of a dramatic rise in awareness of aggressive tax avoidance schemes – film partnerships, loss-making enterprises and even outright tax evasion have been making headlines, bringing the potential to give tax avoidance a bad name.
But as HMRC has clearly said, these aggressive tax avoidance schemes are completely different to legitimate tax reliefs that are put in place for good reason, and are designed to help the small businessman, for example, or allow married couples to make the best use of their situation.
Tax planning is a complex and time-consuming process, but for the adviser who gets it right, it can be a useful reminder to clients of the justification for their fees.
