How to save on tax – 10 top tips
1. Live in an area with low council tax
• Not all areas of the UK pay the same council tax, so research taxation levels before you rent or buy a property.
2. Make sure you know your personal allowance
• Your personal allowance is the proportion of income you earn before tax. This is the same for most people, but there are some exceptions. Make sure you know your personal allowance in order to save money.
3. Limit your alcohol/cigarette consumption
• In the UK, these items are taxed heavily, so save money and stay healthy by keeping alcohol and tobacco consumption to a minimum.
4. Make use of tax-free savings with ISAs
• An ISA (Individual Savings Account) allows money to be paid into a tax-free deposit account or to be invested in shares or bonds, with no further tax on any income or growth.
5. Know your tax code
• Your tax code helps the government to calculate your tax payments. If it is wrong, you may end up paying too much tax, so it helps to know your tax code.
6. Make charitable donations through Gift Aid
• Under the Gift Aid scheme a charity can claim back the tax on your donation from the government, automatically increasing the monetary value of your
7. Ensure you are paying the right level of savings interest
• If you don’t pay tax because your income is low, then you won’t pay any interest on savings. Make sure you pay the right level of tax on your savings interest.
8. Claim VAT back on business expenses if you are self-employed
• If you buy something for your business, you do not have to pay Value Added Tax (VAT) on it. Make sure you keep your receipt and claim it back.
9. Pay into a pension scheme
• Contributions to your pension scheme can be made from your gross pay, before any tax is charged.
10. Assets transfer for married couples
• Switching savings or investments between husband and wife or civil partners can reduce a couple’s overall tax exposure.