20 ways to save tax in the ‘20s

The start of a new decade is a brilliant time to review ways to save on your tax bill. So, for the ‘20s, here are 20 top tips!

  1. Check your tax code – If you’re an employee, your payslip will show how much tax will be deducted from your salary. It’s worth reviewing this regularly to make sure it’s still right for your particular circumstances.
  2. Maximise your personal savings allowance. In 2019-20, basic-rate taxpayers can earn £1,000 of interest tax-free on their savings. If you’re a higher-rate taxpayer, your tax-free allowance is £500 and you’ll only pay tax on savings income above this amount.
  3. Pay into an employer’s pension scheme – you can make contributions (including any additional voluntary contributions you make) from your gross pay, before any tax is charged. As a bonus, the government will top up your pension with tax relief, helping you save for retirement. Our payroll team can explain more about this.
  4. If you own your business, you can choose when your accounting year ends. If it’s earlier in the tax year, it’s less likely that you’ll struggle to pay your tax bill on time. Find out about our company tax return service.
  5. If you happen to make a loss, you can carry it forward to offset it against profits from a more successful year, decreasing your taxable income.
  6. Claim your dividend allowance. You can earn up to £2,000 each year in dividend income without paying tax.
  7. Take advantage of your annual tax-free ISA allowance. This currently allows you to deposit up to £20,000 into ISA accounts.
  8. Claim all of your tax-deductible expenses as these reduce your final tax If your income has fallen unexpectedly, you could be overpaying on your tax based on previous earnings. If so, you may be able to reclaim this overpaid tax.
  9. Invest with an Enterprise Investment Scheme, whereby the government offers extra tax relief on some investments. You could be in a position to deduct 30% of your investment from your income tax bill for the year. potentially saving up to £300,000 in income tax.
  10. Find out if you’re eligible to claim working tax credits or child tax credits – these help people looking after children, disabled workers and other people on low incomes.
  11. If you’re a parent you can claim tax-free childcare. The tax-free childcare scheme allows you to claim back 25% of your childcare costs, up to £500 every three months (some conditions apply).
  12. If you’re married or in a civil partnership, use the marriage allowance. This tax benefit allows you to transfer any unused personal allowance from the lower-earning partner to the higher earner.
  13. If you receive income from a job or pension that’s below £12,500, but you earn additional income through interest on savings, you may qualify for the starter savings allowance. This means that interest you earn up to £5,000 is tax-free, in addition to your personal savings allowance.
  14. If you’re an employer, starting up a “salary sacrifice childcare scheme” provides savings for you and your employees.
  15. Capital gains – such as property or antiques, for example – of up to £12,000 are tax-free. If you’re married or in a civil partnership and you who own assets jointly, you can claim a double allowance of £24,000. Find out more by watching our video here.
  16. Transferring assets to your husband, wife or civil partner avoids paying capital gains tax if they pay a lower rate of tax than you.
  17. Changing your car? Low-emission cars are taxed at a lower percentage of their list price than cars with a high CO2 rating.
  18. Making donations to charity is tax-free and either you or the charity can claim the tax back through Gift Aid. If you’re a registered charity, click here to see how we can help you.
  19. Beat the tax return deadline to avoid an automatic fine! If you submit a self-assessment tax return, you have until 31 January 2020 to send in your 2018-19 return. You’ve missed the boat to file on paper. If you’re not yet filing online, chat to us about getting set up in line with “Making Tax Digital.”
  20. Choose a first-class accountant and then you won’t have to worry about the other 19 points!! We’ll make sure you pay the right amount of tax and not a penny more.

This list shows just a selection of the ways in which you can save on your tax bill. Whether you’re employed, self-employed, a large-scale business owner, contractor or charity, we’re here to advise you on the most profitable way to run your business. Why not start the year with a free consultation? Get in touch today to book an appointment, coffee and no obligation chat.

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