Top tips for business tax planning in 2024 to share with your clients 

Proper planning can mean significant tax savings and improved financial health for your clients, and the complexities of the UK tax system mean that the professional guidance of an accountant is essential.  

At Capium, we’re here to empower accountants with the tools you need to offer that expert advice. Here are some top tax planning tips for 2024 to share with your clients. 

Take advantage of the Annual Investment Allowance (AIA) 

The AIA allows businesses to deduct the full value of qualifying capital expenditure from their profits. This is particularly beneficial for businesses planning to invest in new equipment or machinery, as it can significantly reduce their taxable profits. 

Details to highlight:   

Make sure your clients understand that the £1 million AIA limit will continue throughout the 2024/25 tax year. Encourage them to time their investments to fully utilise this allowance, as expenditure exceeding the limit will be subject to the standard capital allowances, which provide less immediate tax relief. 

Capital Gains Tax (CGT) planning 

For 2024/25, the CGT allowance has been significantly reduced. The tax-free allowance for individuals is now £3,000, down from £6,000 in the previous year. For trustees, the allowance is even lower at £1,500. This reduction means that more gains will be subject to tax, increasing the importance of careful planning. 

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Advise your clients on strategies to minimise CGT, such as utilising the annual exemption, spreading disposals across tax years, or making use of losses to offset gains. Capium’s tax planning tools can help track and forecast gains, allowing for more effective tax management. 

Maximise Research and Development (R&D) tax relief 

R&D tax relief remains a powerful incentive for businesses engaged in innovation, and the government announced that this year the two core R&D scheme – SME and RDEC – would be merged to keep things simple, with a headline rate of relief of 20%. 

Details to highlight:  

Ensure your clients understand how the new merged scheme differs from the two previous schemes, and that qualifying R&D activities can include work done to overcome scientific or technological uncertainties, even if the project does not succeed. Capium’s software can assist in documenting these activities accurately, making the claims process smoother. 

Plan for pension contributions

The pension annual allowance remains at £60,000 for 2024/25, with a tapered reduction for high earners. Contributions within this limit are deductible from profits, reducing the overall tax liability. However, the pensions lifetime allowance has been abolished and replaced with two new measures. 

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Encourage clients to review their pension arrangements regularly, and explain the new ‘lump sum allowance’ and ‘lump sum and death benefit’. Capium’s payroll software integrates pension contributions seamlessly, making it easier for accountants to manage and advise on pension strategies. 

Proper corporation tax planning 

For the 2024/25 tax year, the main rate of corporation tax is 25% for profits over £250,000. Businesses with profits under £50,000 will continue to pay the lower rate of 19%, and those with profits between these thresholds will face a marginal relief rate. 

Details to highlight: 

Help your clients understand that taxable profits include trading profits, investment income, and chargeable gains. Emphasise that allowable business expenses can be deducted from these profits, thus reducing the overall tax liability. 

Missing corporation tax deadlines can result in penalties, so timely management is crucial. 

Use Capium’s tax management tools to track key dates and automate reminders, ensuring your clients never miss a deadline. This also allows for better cash flow planning, helping clients to set aside funds for their tax liabilities. 

The value of accountants in tax planning 

Accountants play a critical role in helping businesses navigate the complexities of tax legislation. Here’s why your role is indispensable: 

• You’re experts in evolving tax laws – the 2024/25 tax year brings several changes to tax rates and allowances, including a reduction in the dividend allowance to £500 and adjustments to income tax thresholds that clients might not be aware of 

• You’re not just compliance officers – you’re strategic advisors who can leverage your knowledge of tax legislation and financial planning to identify opportunities for tax savings and business growth 

• You help mitigate risk – errors in tax filing can lead to costly penalties; you mitigate these risks by ensuring accuracy and compliance. Capium’s software automates many of these processes, reducing the risk of human error and ensuring that all filings are submitted on time. 

As the 2024/25 tax year progresses, effective tax planning will be essential for your clients’ success. By leveraging your expertise and Capium’s advanced software solutions, you can provide the strategic advice that helps businesses not only meet their tax obligations, but thrive in a competitive market.