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Time running out for Solihull residents aiming to make tax savings

SOLIHULL taxpayers can cut their tax bills by acting in the last few weeks of the tax year.

SOLIHULL taxpayers can cut their tax bills by acting in the last few weeks of the tax year.

So says Lucas Markou, specialist tax partner at Solihull accountants and business advisers Jerroms LLP.

“In the short time leading up to April 5, there are opportunities to reduce income tax bills significantly” he said.

As one example, he cites the cuts in child benefit where either partner in a couple earns over £50,000 a year. “With careful planning, there may still be time for those potentially affected to avoid losing this benefit,” he said.

“For example, pension contributions may be used to reduce income to this level, with the result that child benefit may be preserved.

“More generally, pension contributions are very valuable in planning because tax relief may be available at the taxpayer’s highest tax rate, so a £1,000 gross contribution to a pension fund in the current tax year could cost just £600 or even £500.”

The changes in the private pensions regime mean that the window of opportunity until the end of the tax year is particularly significant because the government is cutting the total of contributions that attract tax relief in any one tax year by £10,000.

Mr Markou said: “If you have sufficient earnings, it is worth considering the option of contributing the maximum permitted amount in the current tax year and using up any unused tax relief for the last three tax years”

 

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