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A good year for your personal finances?

A good year for your personal finances?

Although thinking long-term is crucial for tax planning, we as accountants and you as individuals need to look at what opportunities are available in the short-term. The start of the new tax year means that together we can make a plan regarding your tax liability for the next 12 months.            

With that in mind, here are 3 important things that could make a difference to your tax bill during the 2015/16 tax year.

ISA allowance

The savings environment isn't exactly great right now, and it hasn't been for a number of years. At the moment you'll be hard pressed to find a short-term fixed-rate ISA paying even 2%. This has led many to assume that ISA saving is a pointless exercise. After all, if you want your savings to earn you interest, why would you tie up your money for 4 or 5 years just to break that elusive 2% annual return?

We, however, prefer to take the 'glass-half-full' approach. Even though you're not going to be earning a lot from your savings, it's important to remember that ISAs are tax-free. As the ISA allowance has risen slightly to £15,240 in 2015/16, you'll be able to save that little bit more without having to pay tax on your savings interest.

Income tax changes

Income tax moves will also loosen the strings of the household purse. On 6 April the personal allowance rose from £10,000 to £10,600. Over the next few years it'll increase further to £10,800 and £11,000 in 2016/17 and 2017/18 respectively.

The higher rate threshold also increased from £41,865 to £42,385 on 6 April.

Marriage Allowance

6 April saw the government launch a new type of income tax allowance: the Marriage Allowance.

The Marriage Allowance allows a spouse or civil partner earning less than £10,600 to transfer up to £1,060 of their personal allowance to their partner. The person receiving the extra allowance must be earning between £10,601 and £42,865 and both people must have been born after 6 April 1935.

With potential tax savings of £212 a year, the Marriage Allowance could be a good way of knocking another chunk off your personal tax bill.

Contact us

We can help you minimise your tax bill. Fill out our contact form, call us on 01628 631 056 or email geoffk@knightandcompany.co.uk for assistance with planning your personal finances.