By enlarge, this founding father of the United States was right: taxes are pretty inevitable. However, if you’re wise to the rules you can save money on the amount of tax that you pay and ensure you’re not handing over more than you’re meant to. Here are ten top tax tips:
1 – Know your tax code
Tax codes allow the authorities to group together people and ensure that they pay the appropriate amount. But sometimes circumstances can change and you could be on the wrong tax code – potentially causing you to pay more than you’re supposed to. So check your tax code online today!
2 – Transfer to your partner
If you’re on a high-rate of tax and you have a spouse earning not very much – or not at all – you’ll be able to transfer some of your money to their name and pay less.
3 – Make the most of employee benefits
If you’re employed, it’s possible to pay for some essential goods and services before it gets taxed in your pay packet – ensuring you pay less overall. There are some employers who offer tax-free loans that allow commuters on public transport to buy a season ticket and repay it in the pay packet. Likewise, childcare salary sacrifice schemes allow you to pay for care for any little ones you have without being taxed on it first.
4 – Pay up on your pension
As well as planning for the future, it makes sense tax-wise to pay into a pension as anything you pay isn’t counted as part of your income tax.
5 – Make the most of being self-employed
If you’re self-employed, there are a number of ways that you can reduce your tax burden. If you’re profitable in one year and not the next, you can combine the two years in your tax situation and offset the profit. You can also make the most of a number of expenses to ensure that you don’t have to pay tax on essential business services.
6 – Or make the most of being older
If you’re working beyond the state retirement age (62 for women and 65 for men), you don’t have to be paying National Insurance contributions.
7 – Pay into an ISA
If you’re looking to save money, Independent Savings Accounts (ISAs) are the way to go, as they allow you to save money without having to pay any tax on the earnings.
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