The Sadler Ledger: Getting ready for the new financial year

This month at Sadler Advisory has been incredibly busy. While the individual tax return season is well and truly behind us, we've taken the opportunity to reflect on our processes from the past year.

REFLECTIONS AND IMPROVEMENTS

Our primary focus has been on identifying areas for refinement to ensure an even better customer experience for you next year. We're committed to continuous improvement and are excited about the changes we'll be implementing. In addition to this, we've been working closely with several clients on managing their cash flow, providing strategic advice and support during these fluctuating economic times.

UPDATES ON MAKING TAX DIGITAL

Additionally, I recently attended a very informative partner day with FreeAgent in Covent Garden, where we discussed the upcoming changes for Making Tax Digital for Income Tax. Specifically, for Sole Traders and landlords earning over £50,000, this will come into effect on April 6th, 2026. A subject which I’ll touch on in future articles.

WHAT'S CHANGING ON 6TH APRIL?

There’s been a lot of talk around the upcoming changes to National Insurance and other tax rules. We’ve been helping individuals explore options, particularly salary sacrifice for pensions as a smart way to soften the impact.

KEY CHANGES OVERVIEW

Here’s a quick overview of the key changes:

• Employer’s National Insurance is rising from 13.8% to 15%, and the threshold is dropping from £9,100 to £5,000. This means higher costs for many, especially directors.

• Employment Allowance is increasing from £5,000 to £10,500, which may help businesses with 5–7 employees offset the rise.

• Stamp Duty Thresholds are reverting to pre-2022 rates. For first-time buyers, the threshold drops from £425,000 to £300,000.

• Capital Gains Tax increased on Oct 30th, 2024: now 18% for basic rate and 24% for higher rate taxpayers.

• Furnished Holiday Let Relief is being phased out. From April 6th, mortgage interest can’t be deducted—putting these in line with standard buy-to-lets.

Let us know if you'd like to talk through how these might affect your situation.

HOW TO SAVE TAX BEFORE 6TH APRIL 2025

There are two primary ways to potentially save tax before the April 6th deadline, both of which require an outflow of cash.

CHARITABLE DONATIONS

Firstly, for anyone considering making a charitable donation, now is the time to act. If you've been contemplating it, make a decision and ensure the donation is made before the close of business on April 5th.

PRIVATE PENSION CONTRIBUTIONS

Secondly, contributing to a private pension is another effective strategy. Many people already have pension contributions through their employers, but particularly for clients with incomes between £100,000 and £125,000. It is strongly advisable that you consider making additional contributions. This moves cash from your personal bank account into your pension, which can significantly reduce your tax liability.

For those who are considering a personal pension contribution it's crucial to get organised early, as you need to inform your pension scheme in advance. Even smaller contributions, such as £500 or £1,000, can be beneficial and serve as a good tax planning initiative.

As with all things related to investments, it’s best to work with a financial planner so that you receive sound advice. We are not allowed to give financial planning advice, however we can inform you of the related tax savings which is what we are doing now.

TOOL OF THE MONTH

For our bookkeeping services, we utilise Apron as a data capture tool, which streamlines the process of clients submitting invoices and receipts to their accounting software. Apron also offers payment functionalities, and includes free payroll payments through its batch payment facility.

I've been using this for the past year, and even with only four employees (including myself), it saves a significant amount of time. For example: I can download the batch payment file from our payroll system, upload it to Apron, and execute a batch payment effortlessly. I highly recommend this tool for our clients.

CLIENT NEWS

We are thrilled to announce that one of our clients, Interface Aesthetics Training (pictured), has won the best independent training provider award at the Aesthetics Award for 2024! Interface Aesthetics Training is a market leader in training for individuals entering the aesthetics industry, often from medical backgrounds such as nursing or medicine. This prestigious award, adjudicated in March, is a testament to their commitment to excellence. Congratulations to Interface Aesthetics Training for this well-deserved recognition!

At the very same Aesthetics awards, Jordan Faulkner who runs his own business, Allo Aesthetics was awarded “Rising Star of the Year” award. Congratulations Jordan!

LOOKING AHEAD

The Sadler Ledger is our monthly blogs that are delivered first as email newsletters and will cover other themes. Sign up here or keep an eye out for them on our blog to find out what they are.

John Sadler