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Tax allowances - business owners make plans

Child Benefit

Child Benefit will be scrapped from 2013 for those families with at least one higher rate taxpayer. Couples with two children will be worse off by approximately £1,750 per annum.

The roll out of this change has not been mapped out yet but there are some things that should be considered ahead of this. Reducing taxable income even for one or two years may help retain this benefit for a little longer!

It may be possible to for example, to increase dividends in the short term (across 2011 and 2012) and take smaller dividends in 2013, but clearly each case would need to be reviewed.

If you are potentially affected by this, consider if you can influence your exposure ahead of time.

Annual Investment Allowance

This valuable capital allowance / tax relief is being changed in April 2012. This allowance currently provides 100% tax relief for many capital spending categories. In April 2012, the limit will be reduced from £100,000 per annum to £25,000. Any businesses considering capital investments in the near term should be conscious of this date looming and consider the effect.

Contact IGC Accounting Services Ltd for more detail