Our experienced tax team can assist you with your personal tax affairs. The services that we offer include preparation of tax returns, calculating your tax liabilities, checking code numbers, obtaining retirement pension forecasts and assisting with tax credit claims. Many of us have previously worked for HM Revenue & Customs so we can offer an insight in the Revenue’s sometimes mysterious ways!
At Pierce we can assist clients with the preparation of their tax returns, whether those returns are for partnerships, individuals or trusts in our tax department. We file clients’ returns electronically so there is no need for the forms to be submitted to HM Revenue & Customs until 31 January following the tax year end and electronic filing speeds up repayments of tax. There are now daily penalties for personal and partnership tax returns once the return is more than three months late therefore let us take the strain and deal with your tax return filing.
Where a UK taxpayer makes a gift to a charity under the Gift Aid scheme the gift is treated as having suffered tax at basic which the charity can reclaim; for example a gift of £80 is treated as if the tax payer had paid over £100 less tax at 20 per cent. The charity can reclaim the £20 from the Treasury and if the donor is a higher rate tax payer (40 per cent) their income is reduced by £100 and they receive a further £20 of tax relief. Therefore a £100 gift to charity has only cost the taxpayer £60.
The Gift Aid scheme can provide a tax planning tool for higher rate taxpayers who wish to reduce their income for tax purposes. Where an individual’s income exceeds £100k their personal allowance will be reduced at the rate of £1 for every £2 of income over £100k. A Gift Aid payment can be used to reduce income below £100k so full personal allowance can be claimed as well as the higher rate tax relief on the gift aid payment.
Pension contributions have waned in popularity over the years because of perceived high charges, poor returns and the gradual reduction in the level of contribution qualifying for tax relief. However the value of the tax relief should not be overlooked particularly for higher rate taxpayers.
Pension contributions can be used to reduce income below £100k for claiming personal allowance thus effectively increasing the value of the higher rate tax relief to 60 per cent from 40 per cent and is also useful for those caught by the higher income child benefit charge as the gross value of the contribution can reduce taxable income.
For investors who want greater control over the investment of their contributions a SIPP could be used.
Salary sacrifice arrangements can also be a good way for employees to contribute to a pension scheme as there are also national insurance savings and many employers will pay the employers’ national insurance savings into the employees’ pension scheme thus increasing further the contributions made to the scheme.