We are fast approaching the end of another tax year, 5 April 2022.

To benefit from tax relief for 2021-22 you will need to make any top-up payment on or before this date.

To help you reach a decision, we have summarised the present tax rules that set out how much you can pay into your fund and still claim tax relief on the contributions made:

Annual allowance

Most taxpayers can pay up to £40,000 a year into their pension schemes. However, this allowance may be reduced if you have a high income or if you have flexibly accessed your pension pot.

Three-year carry back

If you use all of your annual allowance for 2021-22, you might be able to carry over any annual allowance you did not use from the previous three tax years. Which means that for 2021-22 once the annual allowance is exhausted you could use unused allowances for 2018-19, 2019-20 and 2020-21.

What if you pay more than your annual allowance?

The short answer to this question is that you or your pension provider will have to pay tax.

Exceptionally, this would not apply in the year you retired due to ill health, or if you died…

What about your State Pension?

While you are considering your pensions’ funding, don’t forget that it is now possible to check your State Pension forecast online.

You can use this service to find out how much State Pension you could get, when you can get your pension, and how to increase your pension, if you can.

You will need to prove your identity by signing in via your Government Gateway.

To login go to https://www.gov.uk/check-state-pension

Planning note

For 2021-22, if you are obliged to defer contributions until after the end of this tax year, perhaps due to cash flow issues, don’t forget that any unused relief for the tax year 2018-19 will be lost under the three-year carry back rule. If feasible, you may want to consider going the extra mile to fund a top-up before 5 April 2022 to at least utilise your annual allowance for 2021-22 and any unused allowance for 2018-19.

Ultimately, the amount you can invest will depend on your personal financial circumstances and will be best discussed and agreed with your pension’s advisor.

1 February 2022 – Due date for Corporation Tax payable for the year ended 30 April 2021.

19 February 2022 – PAYE and NIC deductions due for month ended 5 February 2022 (If you pay your tax electronically the due date is 22 February 2022).

19 February 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2022.

19 February 2022 – CIS tax deducted for the month ended 5 February 2022 is payable by today.

1 March 2022 – Due date for Corporation Tax due for the year ended 31 May 2021.

2 March 2022 – Self-Assessment tax for 2020-21 paid after this date will incur a 5% surcharge unless liabilities are cleared by 1 April 2022, or an agreement has been reached with HMRC under their time to pay facility by the same date.

19 March 2022 – PAYE and NIC deductions due for month ended 5 March 2022 (If you pay your tax electronically the due date is 22 March 2022).

19 March 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2022.

19 March 2022 – CIS tax deducted for the month ended 5 March 2022 is payable by today.

If politicians have it right, we may be approaching the end of the major disruption to economic activity of the past two years.

Which is great news for those trades badly affected by continuing lockdown and other restrictions.

Unfortunately, rapid growth following a long period of depressed trading conditions can prove to be disastrous.

The danger arises if you offer your customers more generous trading terms than your suppliers and you have very little left in your bank accounts.

Consider that you have £1,000 in your current account and have no chance of overdraft or loan support from your bank. Your sales for January 2022 are excellent, £20,000, but to secure these sales you were obliged to offer customers 60 days to pay their bills.

You were able to supply goods from stock so there is no need to immediately re-stock. However, in the month of January, you need to settle past VAT and Corporation Tax liabilities amounting to £10,000 and in January and February general overheads (wages, rent, transport costs etc.) totalling a further £9,000.

The terms you have offered customers mean that the sales you have achieved in January will not generate cash-flow until March and you are faced with fending-off HMRC (£10,000) and other creditors (£9,000) for two months with just £1,000 in your bank account.

Business owners facing this dilemma need to consider their options and creating a simple cash-flow forecast will reveal the peaks and troughs in your bank balances and give you time to consider your choices.

Please call if you need help in drawing up suitable cash-flow forecasts.

With rare exceptions, once the end of the tax year has passed, tax planning options to reduce liability are no longer possible.

For Income Tax and Capital Gains Tax purposes, this means that the majority of the tax reduction options will cease unless actioned before 6 April 2022, the start of the next tax year.

Which means individuals and the self-employed have just over two months to consider their options.

If you fall into any of the following categories, please contact us so we can discuss your options:

• Your annual income is approaching £100,000, perhaps for the first time.
• You claim Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during 2021-22.
• You have not yet considered topping-up pension contributions for 2021-22.
• You are self-employed with a 31 March 2022 year-end.
• You are self-employed and considering a significant purchase of equipment including commercial vehicles.
• You are the director/shareholder of a limited company and have not yet considered voting final dividends or bonuses for 2021-22.
• You have experienced, or are contemplating, a change in your personal status (single, married, separating, joining, or dissolving a civil partnership).

This list is by no means complete. If your tax affairs are complex pick up the phone. There is no joy in being advised after the tax year end, 5 April 2022, that if you had acted on or before that date you may have reduced your tax liabilities.

Since Monday 17 January, people with COVID-19 in England can end their self-isolation after 5 full days, as long as they test negative on day 5 and day 6.

The decision has been made after careful consideration of modelling from the UK Health Security Agency and to support essential public services and workforces over the winter.

It is crucial that people isolating with COVID-19 wait until they have received 2 negative rapid lateral flow tests on 2 consecutive days to reduce the chance of still being infectious.

The first test must be taken no earlier than day 5 of the self-isolation period, and the second must be taken the following day. If an individual is positive on day 5, then a negative test is required on day 6 and day 7 to release from isolation.

It is essential that 2 negative rapid lateral flow tests are taken on consecutive days and reported before individuals return to their job or education, if leaving self-isolation earlier than the full 10-day period.

For instance, if an individual is positive on day 5, then a negative test is required on both day 6 and day 7 to release from self-isolation, or positive on day 6, then a negative test is required on days 7 and 8, and so on until the end of day 10.

Those who leave self-isolation on or after day 6 are strongly advised to wear face coverings and limit close contact with other people in crowded or poorly ventilated spaces, work from home if they can do so and minimise contact with anyone who is at higher risk of severe illness if infected with COVID-19.

The default self-isolation period continues to be 10 days, and you may only leave self-isolation early if you have taken 2 rapid lateral flow tests and do not have a temperature in line with guidance.

The changes would appear to be an attempt to return key workers to their workplace as soon as possible.