Author: Glenn

For high net worth individuals (HNWIs), tax planning is not simply a compliance activity, it is a strategic tool to preserve and grow wealth. With rising scrutiny from HMRC, frozen allowances, and increasingly complex legislation, the value of well-structured planning has never been higher.

HNWIs typically have multiple sources of income: from employment, dividends, property, pensions, or overseas investments. This complexity brings opportunities, but also risk. Without active tax planning, much of that income can be lost to inefficient structuring or missed reliefs.

Using allowances such as the personal allowance, dividend allowance, and savings allowance is key. Where income exceeds £100,000, tapering of allowances becomes relevant. Income splitting between spouses and the use of family investment companies or trusts can help manage liabilities.

The capital gains tax (CGT) annual exemption is now only £3,000 (2025–26). Disposals must be timed carefully, with use of spousal exemptions or crystallising gains across tax years considered.

HNWIs are most exposed to inheritance tax (IHT), which charges 40% on estates above £325,000 (plus any residence nil-rate band). Making lifetime gifts, using trusts, and taking advantage of the exemption for gifts from surplus income can significantly reduce exposure.

Global families must manage UK tax residency and domicile status carefully. The remittance basis may apply to foreign income, but this often requires payment of the remittance basis charge. Changes to domicile treatment post-April 2025 make planning in this area even more important.

Pensions, ISAs, and offshore bonds can provide valuable tax sheltering. For HNWIs, using the annual and lifetime pension allowances efficiently, especially while they remain available, is a core planning task.

In summary, proactive tax planning is about more than saving money. It gives HNWIs confidence, control, and the ability to plan for the future. With HMRC increasing its focus on high earners, reviewing tax affairs annually is no longer optional, it makes good financial sense.

Gross profit margin
This measures the profitability of your core operations by comparing gross profit (sales minus cost of goods sold) to total revenue. A stable or improving gross margin indicates pricing, production, or service delivery is efficient. A declining margin may signal rising costs or pricing issues.

Formula: (Gross Profit ÷ Revenue) × 100

Cash flow
Positive cash flow ensures a business can meet its obligations, pay suppliers and staff, and invest in growth. Even profitable businesses fail without adequate cash. Tracking cash flow (operating, investing, and financing activities) helps prevent liquidity crises.

Monitor: Monthly net cash inflow/outflow and rolling 3-month cash forecast

Customer acquisition cost (CAC)
This shows how much it costs to acquire a new customer. If CAC is rising without a corresponding increase in customer value or retention, it can drain profitability. Ideally, CAC should be lower than the revenue generated by each customer over their lifetime.

Formula: Total Sales and Marketing Costs ÷ Number of New Customers

Net profit margin
This is the bottom line—what remains after all costs, taxes, and interest. It reflects overall efficiency and financial viability. A strong net margin gives room for reinvestment and debt servicing, and signals long-term sustainability.

Formula: (Net Profit ÷ Revenue) × 100

1 July 2025 – Due date for corporation tax due for the year ended 30 September 2024.

6 July 2025 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2025 – Pay Class 1A NICs (by the 22 July 2025 if paid electronically).

19 July 2025 – PAYE and NIC deductions due for month ended 5 July 2025. (If you pay your tax electronically the due date is 22 July 2025).

19 July 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2025. 

19 July 2025 – CIS tax deducted for the month ended 5 July 2025 is payable by today.

1 August 2025 – Due date for corporation tax due for the year ended 31 October 2024.

19 August 2025 – PAYE and NIC deductions due for month ended 5 August 2025. (If you pay your tax electronically the due date is 22 August 2025)

19 August 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2025. 

19 August 2025 – CIS tax deducted for the month ended 5 August 2025 is payable by today.

Buying a zero-emission electric car through your limited company could mean 100% tax relief in year one. Understand the capital allowances and boost your business’s tax efficiency with smart vehicle choices.

If you are considering purchasing a company car through a limited company, it’s important to understand the tax implications, especially the significant tax write-offs available for electric vehicles with zero emissions.

The tax treatment will depend on how the car is financed, but in most cases, the vehicle will be classified as a fixed asset, with tax relief available through capital allowances. Unlike other business assets, company cars do not qualify for the Annual Investment Allowance (AIA). Instead, they fall into specific capital allowance categories based on their CO₂ emissions and when they were purchased.

If you purchase a new and unused fully electric or zero-emission car, it qualifies for a 100% First Year Allowance (FYA). This means:

• You can deduct the full cost of the car from your company’s taxable profits in the year of purchase.
• The car must be brand new and registered as zero-emission to qualify.

If the car does not meet the criteria for 100% FYA, it will fall into one of the following categories:

• 18% Main Rate Allowance: Applies to cars with lower CO₂ emissions (but not zero). 18% of the car’s cost can be written off each year on a reducing balance basis.
• 6% Special Rate Allowance: Applies to cars with higher CO₂ emissions or certain second-hand vehicles. Only 6% of the cost is deductible each year.

Private pension contributions can attract up to 45% tax relief, if you know how to claim it. Use your £60,000 annual allowance wisely and carry forward unused relief from past years to boost your retirement savings.

You can usually claim tax relief on private pension contributions worth up to 100% of your annual earnings, subject to the overall £60,000 annual allowance. Tax relief is granted at your highest rate of income tax.

This means that if you are:

• A basic rate taxpayer, you receive 20% tax relief
• A higher rate taxpayer, you can claim 40% tax relief
• An additional rate taxpayer, you can claim 45% tax relief

For basic rate taxpayers, the 20% tax relief is typically applied automatically through your pension provider—no further action is needed.

If you pay higher or additional rate tax, you can usually claim the extra tax relief.

• An additional 20% on contributions corresponding to income taxed at 40%
• An additional 25% on contributions corresponding to income taxed at 45%

The tax rates and reliefs outlined above apply to taxpayers in England, Wales, and Northern Ireland. If you're based in Scotland, different income tax bands apply, which can affect the amount of tax relief available.

The annual allowance for tax-relievable pension contributions is currently set at £60,000. If you haven’t used your full allowance in the previous three tax years, you may be able to carry forward unused amounts, provided you were a member of a registered pension scheme during those years.