🟣🟢 Navigating Tax Changes in the Autumn Budget

🌅 Hello there…

In this week’s Financial Stuff:

• 🐝 Busy-ness of business

• 🎯 Autumn Budget - impact on tax planning

• 🤔 The Power of Dividends…

So let’s get started…👉

It’s been a funny old week, this week.

Between the pouring rain and the usual dreary news, the bright spot was Ottie, my 8 week old labrador retriever puppy (sorry to mention her again but she really is the cutest).🐶

And I’ve also had some really interesting conversations this week - with smart people who want to get their financial stuff sorted!

I love it! 💕

Who said financial planning can’t be exciting? 🥳 

But I know how it goes; when you’re so focused on keeping things running, it’s easy to put your own future on the back burner.

We don’t talk about this stuff enough, do we? How to make sure we’re actually ready for what comes next—whether that’s stepping back a little, enjoying more of what we’ve worked for, or planning for a comfortable retirement (without the worry).

And your business can do more for you than just provide a good income right now.

It could be the key to your financial independence later on if you play it right.

And no, I’m not talking about selling up and moving on tomorrow.

It’s about starting to put a few things in place that make a real difference in the long run.

I’ve seen too many people leave this stuff until the last minute, and it’s just not worth the stress.

This newsletter is all about me sharing some ideas about how to leverage your business for your future. It’s not rocket science, just a few smart tweaks here and there.

For now, have a think about this: What would your personal finances look like if you gave them the same attention as your business?

Wouldn’t it be great to get this sorted so you can enjoy what’s next without the headaches 😊

🎯BUSINESS OWNERS STRATEGIES
Autumn Budget: Impact on Tax Planning

With the Autumn Budget approaching, there’s plenty of speculation about what changes might be coming - especially when it comes to taxes.

As a business owner, any changes could affect both your company’s finances and your personal wealth, so it’s important to stay ahead of the curve.

Here’s what to consider as we await the Chancellor’s announcements:

🟥 Company Pension Contributions could become even more valuable

There’s growing speculation that pension tax relief could be targeted in this year’s budget.

The focus seems to be more on personal contributions and changing to a level rate of tax relief for everyone irrespective of the tax rate they pay.

Right now, pension contributions made through your business are one of the most tax-efficient ways to save for the future.

If the government decides to reduce tax relief, locking in your contributions now could help you take advantage of the current system while it’s still in place.

And even if there is no change, there’s no downside from making a contribution early.

Pension contributions are both tax-deductible and a tax-efficient way to draw money from your company and put it into your own pension pot.

Employer pension contributions don't count as salary, or as a taxable benefit, avoiding income tax and National Insurance contributions.

🟥 Watch out for Changes to Capital Gains Tax

There’s ongoing speculation that capital gains tax rates might increase to align more closely with income tax rates.

If this happens, it could have a impact on how much tax you pay when selling business assets or stepping back from ownership.

There’s no point overreacting to this if you’re not already well down the road to selling your business.

Many experts feel that the current Business Asset Disposal Relief (previously called Entrepreneurs Relief) lifetime allowance rate of 10% on gains up to £1m won’t change. This is because the last government reduced the lifetime limit from £10m in 2020.

After the budget will be a good time to review any plans you have for selling or transferring business shares, especially if you need to be prepared for potential increases.

🟥 Dividend Tax Increases could be on the Way

One area business owners are watching closely is dividend taxation.

There’s talk that the dividend tax allowance could be reduced, or rates increased, making it more expensive for you to extract profits from your business.

If dividends are a key part of your income strategy, you may want to review how much you’re taking now and consider whether it’s worth maximising this year’s allowance before any potential changes.

It’s sensible to talk to your accountant if you’re not sure.

🟥 Stay Flexible with your Long Term Strategy

While we won’t know the exact details until the budget is announced, it’s always a good idea to plan for the long term.

Look at your business structure, tax strategy, and any personal wealth you’ve accumulated through the business.

Whether it’s setting up pension funds, trusts, adjusting how you manage assets, or investing in tax-efficient ways, making decisions now could save you a lot of stress (and tax) later.

No one loves talking about tax, especially when there’s uncertainty around what might change.

But if you start planning now, you’ll be better prepared to protect your personal and business wealth - whatever the Chancellor has in store on the 30th October.

🤔 MARKET INSIGHTS
The Power of Dividends: for your Pension or ISA

You know how dividends work for you in your own business, right?

But you might not realise the way they work in the money you’ve got tucked away in funds in your pension fund or ISA.

Dividends in funds can be a bit of a mystery, but once you understand them, you’ll see how they can give your investments a real boost without much effort.

Think of it like this: when you invest in funds or shares, whether it’s through your pension or ISA, you’re becoming a part-owner in real businesses.

When those businesses make money, they often share a portion of it with their investors – that’s your dividend.

The fund manager has a choice - either take the dividends as cash (nice if you need a bit of extra income), or reinvest them to buy more shares.

By reinvesting, you’re growing your stake without having to put any more money in. It’s a bit like planting seeds in a garden – over time, those small reinvestments start to grow and multiply. This is called compound growth, and it’s a big deal when it comes to long-term wealth.

For example, a £100 investment in 1999 might be worth £310 today, but with dividends reinvested, it could be closer to £550. That’s the power of compounding quietly doing its thing.

If you’re not sure what’s happening with the dividends in your pension or ISA, it’s worth checking.

Making sure your fund is reinvesting them could be a smart move, especially if you’re still a few years away from retirement and looking to grow that pot.

If you’d like to chat about how dividends can work for you, or if you’re curious about making the most of your investments, give me a shout.

I’m happy to help you figure out what’s best for your situation and get you on track for a comfortable future.

😎AND FINALLY
This week on Youtube…

If you haven’t watched it yet, check out my recent YouTube video ‘Speculation on Pension Changes in the Autumn 2024 Budget’

Check it out here 👇👇👇

As always, I hope you found this helpful.

If you have any questions at all, drop me a note.

Hilary 😎

P.S Whenever you’re ready there are 2 ways I can help:

• Continuing the Dividend theme…Watch here» Avoid these Dividend traps!

• Feeling overwhelmed and not sure what to do to get financially secure? Book a Discovery call and find out if we can help you

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