24th May 2016
With the exception of your home, perhaps one of the biggest expenses throughout your lifetime is your tax contribution. With the income tax, road tax, sales tax, stamp duty, etc., a significant portion of your income will be allocated just for tax purposes. However, there are instances where you may find that you have been overtaxed. You may also find that you are eligible for certain tax credits, allowances, or reductions. Here are a few tips to help you save money on your taxes.
It’s not uncommon for the HMRC to tax workers incorrectly. The HMRC data system is designed to catch these errors and notify taxpayers that they have overpaid. However, the system isn’t perfect and even if you haven’t received a letter from the HMRC, you could still be over paying so it’s best to double check.
If you are married or in a civil partnership, you may be entitled to a £432 tax break. The marriage tax allowance was implemented in 2015 and is not well known. It’s estimated that about 4.2 million couples are eligible but 3.7 million couples have yet to claim. To qualify you must be married or in a civil partnership, one spouse needs to be a non-taxpayer (earning under £11,000 per year), and the other spouse must earn in the 20% tax bracket. To apply you can click here.
If you wear a uniform to work and have to wash, repair, or replace yourself, you may be eligible to write off the expenses. To be eligible you must wear a recognizable uniform that shows you have a certain job, it must be mandatory that you wear the uniform, uniform maintenance must be your responsibility and not the employers, and you must have paid income tax in the year you claim for.
It’s estimated that millions of people are missing out on valuable working or child tax credits. These credits are paid directly into your bank account. It’s imperative that you check you eligibility for these credits as you may risk losing them under the new universal credit benefit system, which will be implemented in June 2018. You may be eligible:
If you have a spare room in your house, taking in a lodger is an easy way to help cover your mortgage or rent. Even better news, you do not have to pay tax on the first £7,500 you earn from the renting the room. The Rent A Room scheme increased the allowance in April 2016 from £4,250.
Taxpayers can exchange a certain amount of their salary for other non-taxable benefits, like childcare vouchers. This can reduce yours and your employer’s tax and National Insurance bills. So for instance, an employer paid £55 per week for childcare, a basic-rate taxpayer would save £886 a year.