If you run a business – as a sole trade, partnership or limited company – the end of your accounting period is an important date for tax planning. Tax can be saved or delayed if you move income and expenditure between accounting periods. This is a good time to review your plans for purchases and sales of capital assets or the payment of bonuses and other significant expenses.
Pension contributions must be paid within the company’s accounting period to be deductible for that period. A salary payment can be deductible for the year if it is actually paid within nine months of the year end. It’s worth thinking about the opportunities and the possible problems around the business and tax year-ends.
There will be big changes to the capital allowances for plant and machinery on 1 January 2013. The annual investment allowance (AIA), which allows immediate write-off against profits of the cost of qualifying capital expenditure, increasess from £25,000 to £250,000. If your accounting period straddles 1 January, the AIA rules are complicated. If you are buying any plant in the near future, it will be worth checking what the tax relief will be and considering whether to move the date of purchase before or after the next accounting date.