Year End Tax Review 2008 Contents New Year's resolutions Investment limits Borrowings and tax Family tax planning Mr and Mrs Give generously and save tax Jam today, or jam tomorrow? Tax payback - tax credits Bringing it back home Children's pensions? A matter of trust Children's savings? All change for gains Second homes Portfolio gains Capital ideas Tax-free perks Employee pensions and NIC Pension policies Employee cars and fuel Business tax Pay rise for the other half? Company or trade Two jobs = too much NIC Should VAT be flat? VAT and cash Inheritance tax One careful owner

Jam today, or jam tomorrow? Income is "cut up" into fiscal years to decide whether you are a higher rate taxpayer or not. Someone who goes over the limit one year and has nothing the next pays much more tax than someone with a steady, level income. If your income might fluctuate, it is worth looking at ways to advance or delay the charge on that income in order to even out the tax rates. Of course, if the tax charge is going to be the same in either year, then most people would rather pay the tax later - if you receive some types of income on 6 April rather than 5 April, you may pay the tax on it a whole year later. On 6 April 2008 the basic rate of tax will fall from 22% to 20%. That doesn't make a difference to a higher rate taxpayer, who will still end up paying 40% overall - but if you are a basic rate taxpayer and you can receive income in April rather than March, you will save nearly a tenth of your tax bill on it. Income that can be moved from year to year easily includes: salary (although PAYE means that the payment of the tax cannot be delayed for a whole year); dividends from family companies; distributions from discretionary trusts; tax charges on cashing in some life insurance policies. It is also possible to claim reliefs for some types of payment in particular years to make sure that they reduce income taxable at the highest rate. These include pension contributions and charitable donations. In some cases, income going up and down can be good news for people claiming Child and Working Tax Credits. If your income fluctuates, it's worth talking over the effects with an adviser to make sure you don't lose out. Action Point! Consider moving income or reliefs around 5 April