Tax Planning Accountants in London

Tax planning is the ordinary, legitimate business of arranging your affairs to use the allowances, reliefs and rates that Parliament deliberately created — pensions, ISAs, the marriage allowance, dividend planning, timing of income and gains. HMRC expects you to use them; that's what they're for.

It is not the same thing as tax avoidance schemes — contrived arrangements, often aggressively marketed, that promise to make tax disappear through loans that are "never repaid", offshore trusts with no real purpose, or structures that only make sense because of the tax result. HMRC pursues these schemes for years, and the people left holding the bill are the participants, not the promoters. We have advised clients since 1991 on one consistent basis: if a scheme only works when HMRC doesn't look at it, it doesn't work.

Good planning is quieter than that. It is done in advance, it survives scrutiny, and it compounds — a few unglamorous decisions made before each tax year end, repeated over a decade, routinely save far more than any scheme ever delivered.

Once your income passes £100,000, your tax-free personal allowance is withdrawn — reduced by £1 for every £2 of income above the threshold. The effect is a punishing marginal tax rate on the band of income where the allowance disappears: you lose the allowance and pay higher-rate tax on the same money, an effective rate of around 60% for many taxpayers. Parents can be hit again through the loss of childcare support.

The good news is that this band responds well to planning:

• Pension contributions reduce your income for tapering purposes — a contribution that pulls you back below the threshold can attract effective relief at extraordinary rates
• Gift Aid donations have a similar effect
• Timing — deferring a bonus or accelerating a deductible cost can keep a single year out of the trap
• Salary sacrifice arrangements for pensions or electric vehicles reduce taxable pay directly

If your income hovers anywhere near £100,000, this one conversation usually pays for years of accountancy fees.

If you own your company, how you take money out matters as much as how much you make. The three levers are:

• Salary — deductible for the company, builds state pension entitlement, but attracts income tax and National Insurance
• Dividends — no National Insurance and their own (small) tax-free allowance, but paid from post-corporation-tax profits and only when the company has distributable reserves
• Employer pension contributions — usually deductible for the company and received free of income tax and NI now, growing tax-free until retirement

The optimal mix shifts with corporation tax rates, dividend tax rates, your other income and your family's circumstances — a structure that was efficient three years ago may be costing you money today. We review the mix every year as part of our work for director-shareholders, including whether a spouse who genuinely works in or owns part of the business should hold shares, so the household's allowances and basic-rate bands are used rather than wasted.

Opportunity	Who it helps
Marriage allowance — transfer part of a personal allowance between spouses	Couples where one partner earns below the personal allowance and the other pays basic-rate tax; claims can be backdated up to four years
ISAs — interest, dividends and gains entirely tax-free	Anyone with savings or investments outside a pension; the annual subscription allowance is lost if unused
Pension contributions — relief at your highest rate	Higher and additional-rate taxpayers, who often fail to claim the extra relief due through their tax return
Dividend and savings allowances	Investors and savers — holding assets in the right spouse's name can double the benefit
Capital gains annual exemption	Investors realising gains — £3,000 per person per year, unused amounts cannot be carried forward
Gift Aid	Higher-rate taxpayers who donate to charity and never claim their share of the relief

None of these is exotic. They are simply time-limited, use-it-or-lose-it allowances — which is why an annual pre-year-end review, done before 5 April rather than after, is the single most valuable habit in personal tax.

The tax system is annual, and rates depend on which band income or gains fall into in a given year. That makes timing a genuine planning tool:

• Income — where you control it (bonuses, dividends, drawing profits), shifting income from a high-earning year into a lower one can move it out of higher rates or away from the £100,000 taper
• Capital gains — selling just after 5 April rather than just before gives you a fresh annual exemption and a year's delay on the tax; spreading a large disposal over two tax years can use two exemptions and two basic-rate bands
• Expenditure — for the self-employed and companies, bringing forward deductible costs or capital purchases into the current year accelerates relief
• Pension timing — unused annual allowance can be carried forward from earlier years, but only for a limited period, and only if you act before it expires

Timing costs nothing and involves no risk — it just requires the conversation to happen before the year end, which is why we contact planning clients well ahead of 5 April rather than waiting for their tax return.

Inheritance tax (IHT) is charged at 40% on the value of an estate above the available nil-rate bands. Every individual has a nil-rate band, plus a residence nil-rate band where a home passes to direct descendants — and anything left to a spouse or civil partner is exempt, with unused bands transferring to the survivor. For many couples, that shelters a substantial estate; for London homeowners, property values alone can still push families over the line.

Sensible, uncontroversial IHT planning includes:

• Lifetime gifts — most gifts fall out of your estate if you survive seven years, and the annual gift exemption and regular gifts out of surplus income are immediately exempt
• Wills that use the reliefs — poorly drafted or absent wills waste exemptions and cause avoidable tax
• Pensions — reviewing death-benefit nominations and understanding how your pension is treated on death
• Business and agricultural reliefs — trading businesses can attract substantial IHT relief, but the qualifying conditions need monitoring, not assuming

IHT planning is a long game measured in years, which is precisely why it belongs in an annual review rather than a crisis conversation.

For family-run companies — the backbone of our client base since 1991 — tax planning extends beyond this year's bill to how the business is owned and eventually passed on. We advise on share structures that let family members who genuinely participate hold equity; bringing the next generation into ownership gradually; dividend policies that use the family's combined allowances; pension funding through the company; and preparing a business for eventual sale or succession so reliefs such as Business Asset Disposal Relief and IHT business relief are available when the moment comes, rather than discovered to have been lost on a technicality.

Everything is done with substance — real roles, real shareholdings, documented decisions — because structures that only exist on paper are exactly the kind HMRC unwinds.