Life, Death & Taxes...
Welcome to my fifth bi-monthly commentary which I am writing to provide a perspective on what I am doing on a daily basis in my working life and drawing attention to anything which has happened to me since writing the last blog.
I am pleased to announce that after my last blog we have, as a firm, raised over £700 for the Benjamin Foundation and the sleep out was a great experience. The Benjamin Foundation is a fine charity and I hope that our contribution helps them to continue their brilliant work. Thank you for your generous support which we received here. It is much appreciated by us all.
So, we are now a few days into 2016 and the daffodils have appeared early. The weather is unseasonably mild, but there is a strong chance that the January blues will have appeared in your household. The festive season can be a costly business and the prospect of a tax bill appearing at the end of January is enough to compound the feeling of misery many of us feel at this time of year.
Some of you may feel the need to shed a few pounds or moderate your alcohol consumption following the festivities but how many of us will get out of these good habits before the end of February?
The start of a new year is a great time to think about your year ahead and what you intend to achieve. These goals can be varied but although I cannot help you with weight loss, one thing I can help you with is to get you financially fitter in the coming 12 months.
One simple thing you could consider is something which I do personally. If you are a self-employed individual, to avoid the large tax bill at the end of January why not consider paying HMRC on a monthly basis in the same way as an employee? The payment is made on account to make it more palatable. This is easily done with a telephone call to HMRC.
If you already pay into a pension policy, and if you are reading this I sincerely hope you are, how long has it been since you changed your contribution level? Has it been stuck at the same old level for years? Do you always intend to put it up but never get round to it? Pensions are more flexible than ever so please make the most of the great tax planning opportunities on offer to you before it is too late. Higher rate tax relief is always talked about being under threat when the budget comes around so these valuable rates of tax relief available to higher rate tax payers may not be around forever.
And if you run a business, how much money is sitting in cash in the company bank account "just in case". If you have no clear plans for this money during the next 12 months, you are undoubtedly earning a paltry rate of interest. Make it this year that you look at better alternatives and make this money work harder and more tax-efficiently.
In Norwich house prices rose by 308% between 1995 and 2014. This means that your estate may be worth much more than you realise. Do you really want George Osborne to receive a large proportion of this if anything happens to you?
Many legal firms are offering the chance to have a Will drafted for free in January 2016. This is an essential part of financial planning and one which we encourage all of our clients to arrange as soon as they can and to update it as their personal situation changes over time. When was the last time you looked at your Will? Does it reflect your current life? Or have you still not quite "got round to it"?
Don't wait until spring has sprung to review your affairs. Do it today. Give us a ring to see how we can help you.
Ian Howell DipFA MIFS