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Tax Planning: Tick All The Right Boxes

Updated: Nov 21

Tax planning is a vital part of any financial planning service, and at Reeves Independent we are looking forward to launching our End of Tax Year Planning campaign in the first quarter of 2023.


This tax year will come to a close on April 5th, so in the months leading up to the deadline, we want to ensure you're set for financial success. We will be contacting our clients as part of the campaign, but in the meantime, we've provided guidance on some of the things you should be reviewing to ensure you’re optimising your tax reliefs and allowances.


Make the most of your pension allowance

The first point is to make sure you are maximising your pension contributions. HMRC gives generous reliefs to top up any contributions you make and these can turbocharge your pension pot’s growth.


Basic rate taxpayers receive 20% pension tax relief, so, if you pay £20,000 into your pension, you receive another £5,000 from the taxman by way of income tax relief. Higher rate payers receive relief at 40%.


The amount you can pay into pension is between £3,600 and £160,000 depending on a range of factors. If you meet the criteria, unused allowances can be carried over from the previous three years. You also want to ensure you use your employer contributions effectively, utilising their matched contributions or, salary sacrifice.


Maximise your ISAs

ISAs can be used in conjunction with your pension to generate cash savings.


Each person’s ISA allowance is £20,000 a year, you can also save for your children up to £9,000. With an ISA, you cannot carry forward any allowance, so it’s a case of use it or lose it.


With a Lifetime ISA, the allowance is £4,000 each year from the ages of 18 to 39, and the government will add a 25% bonus of up to £1,000 a year. You can draw from your Lifetime ISA when you first buy a home or when you’re aged 60.


The Personal Income Tax Allowance

The Personal Income Tax Allowance is £12,570, which can come from employment income, pension income, or income from a limited company. If you have no income, it’s possible to withdraw £12,570 from your pension tax free.


Capital Gains Allowance

This tax generally applies to people selling things on for a profit. It most commonly applies to shares, second properties or valuable antiques. The allowance for gains is £12,300 this year. If you receive more profits (or gains) from your sales in a given year, you might have to pay tax.


In conclusion, make sure you’re ticking all these things off your checklist when making your tax plan. But don’t leave it at that, at Reeves Independent we have further income tax planning resources that could improve your position.


This article is informational and should not be taken as advice. If you would like bespoke advice and recommendations, then book a tax review today with a Reeves Independent adviser.



No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.


Please note that tax rates and reliefs are dependent upon an individual’s unique circumstances. These tax reliefs and rates differ between Scotland and England.


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