The top five things to do before 2010

Don't let deadlines pass you by - check out Alison Hunt's top five tasks that need addressing before the year is out and save some serious cash!

If, like me you constantly think of tasks you need to do and promptly forget them again, you're probably fond of good old "To do" lists. But there are always those financial jobs that catch us out - deadlines whiz past and we kick ourselves for not being more organised.

So to give you a hand, here are a few of the financial tasks I've remembered lately that need addressing soon that could reduce your tax bill, or simply save you money!

Car scrappage scheme

If you are planning to buy a new car in the next few months and have an old vehicle to trade in, the car scrappage scheme could be useful to you.

Set up this year by the government, the scheme is open to car dealers who wish to join. Dealers can offer a £2k discount off the price of a new car (£1k of which comes from the government, £1k from the dealer), provided you have an appropriate old one to trade in that will be "scrapped".

And whilst it was originally set up to run from May to September 2009, an extra £100m was added to extend this date to February 2010 (or until this funding runs out).

So who qualifies?

Rules

• The vehicle you trade in must be a car or van weighing up to 3,500kg and registered in United Kingdom on or before 29 February 2000 (cars) or 28 February 2002 (vans).
• Have been registered in your name continuously for 12 calendar months
• Have a UK address on the registration certificate (V5C), a current MOT test certificate, a current tax disc and be insured when the order for the new vehicle is placed.

The new vehicle must be:

• a car or small van weighing up to 3,500 kg
• first registered in the UK on or aftermid May 2009 with no former keepers

With the deadline looming interested parties should consider signing up sooner, rather than later as the funding may run out before the February 2010. Just be aware - the savings may not be as great as they seem.

Tax return

While the date for submitting a self assessment form on paper passed on 31 October 2009 (submit now and you'll incur a £100 fine) you can still do so penalty-free, online until 31 January 2010.

And the good news is there are many advantages to filing online. Not only do you get longer to submit, but the HMRC software is pretty easy to use and the best bit is that it will calculate any tax payable for you. Alternatively, you can of course use commercial software.

If you haven't already registered you can do so here - you'll need your 10 digit Unique Taxpayer Reference (UTR), your National Insurance Number and your postcode to do so - and as this can take up to 7 days it's worth applying for as soon as possible.

All going well you could even decide to emulate the 620 people who decided to file their tax returns on Christmas Day last year!

Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) is the tax payable when you purchase a property. It's charged according to the purchase price of the property, with four different bands applicable (see table below).

Table of Stamp Duty bands

So as you can see, the higher the value of the property, the more SDLT payable.

However, new, temporary thresholds introduced in September 2008 mean that if you purchase a property for £175k or less before 31 December 2009, you will have absolutely no SDLT to pay (after this date the band will drop back to £125k).

So if you are in the process of purchasing a property for less than this sum at the moment it can definitely be in your favour to speed things along and stay within the deadline in order to save tax!

Discretionary Trusts

If you've set up a discretionary trust for your child(ren) I have some bad news for you. As of April next year the taxation rates payable will increase from 40% income tax to 50% and the special trust rate for dividends will rise from 32.5% to 42.5%. Ouch.

But there are a few things you could do to minimise the pain.

For a start you could choose to distribute income before the rate increases - for example, if the money is being used to fund school fees you could try to arrange to pay several year's worth in advance (and negotiate a discount too).

If the beneficiaries are non-taxpayers could they reclaim some of the tax through self assessment?

Alternatively, if your discretionary trust is for one beneficiary only it could be turned into a "revocable life-interest trust" which would be taxed at a lower rate.

Get professional advice

But although I would normally recommend doing your own research, in this case the best move is probably to pay for some professional advice - tax can be hideously complicated so it's worth having an expert advise on your particular situation before making any decisions.

VAT

Finally, don't forget that the standard Value Added Tax (VAT) rate will return to 17.5% from the current 15% on the 1 January 2010.

Retailers will have to start charging VAT at 17.5% from this date for all takings received. However, if a customer pays after 1 January for an item they had taken away before this date, the sale will have taken place before the deadline and 15% VAT should be charged.

So if you've got any large purchases to make on items that are standard VAT rated it could therefore be in your best interests to do so before 1 January (although it's worth considering whether or not the item will go on sale in January by more than the 2.5% reduction!).

Keep these deadlines in mind and you may just start off 2010 with a few extra quid in your pocket!

Start saving with lovemoney.com

Finally, if following these tips has saved you some money, why not make the most of it?

First, adopt this goal: Build up your savings

Next, watch this video: How to save when you've got no money and read this article: Earn up to 8% on your savings

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

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