Connect with us

Markets & Finance

Make The Most Out Of Your Tax

Paying your correct taxes is obviously very important. Without a fair and reliable taxation system society would rapidly deteriorate. When we think of the welfare state we must remember that it is the taxpayers who are financing all public services. A combination of corporate tax, income tax and VAT is used to fund every part of state spending.

However, while it is vital that everybody pays tax, it is equally important to businesses that they only pay their fair share and avoid paying more tax than is required. There are many opportunities for businesses, sole traders, contractors and employees to reduce their tax bill. Here we will look at some important ways to make the most out of your tax.

Make The Most Out Of Your Tax

Check your PAYE Code

If you are on PAYE and your circumstances have changed you should check with the HMRC that you are on the correct code. The HRMC website provides advice on tax codes and what they mean. Your payroll department can also advise.

Use your Personal Allowances

If you are earning and your partner is not you can transfer some of your income to your partner. If you transfer an amount equal to their personal allowance no tax will have to be paid. So long as the payment is a gift and is not a payment for services.

Spread the Income Tax Rate

Again, this is only possible between partners. If one partner is not using their tax allowance, other sources of income, such as shares, bank deposits and property lettings can be transferred to their name. These earnings, up to their tax allowance, will no longer be subject to any tax.

Pay into a Pension Plan

Money paid into your personal pension plan is not taxable up to a certain limit. This is an excellent way to reduce your tax bill today and to start saving for your retirement at the same time.

Invest in an ISA

All money invested in an ISA is free from capital gains tax so any income that you earn on interest is not taxable. The more money you have locked up in an ISA, the greater your tax savings become.

Check your Company Structure

It does not matter if you run a large business or are a sole trader, it is important to check how your finances are managed to ensure that you are always operating in the most tax efficient way.

Rules and regulations are amended and updated every year so the advice received from an accountant five years ago may not be as relevant today. There may be more savings to be made and new ways to structure a business. For example, for contractors it is very tax efficient to make use of umbrella companies.  These companies will act as your employer and pay you a salary through the PAYE system. Contractors send timesheets to the umbrella company who then in turn send an invoice to the client.

There are many ways to reduce your tax bill and a good tax consultant can help you to optimize your earnings.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts

Best Ways to Improve Your Career Best Ways to Improve Your Career
Business6 days ago

Best Ways to Improve Your Career

Working on improving yourself is a continuous process. One that chisels you to perfection every time you do it. It...

New to Golfing? 4 Etiquette Tips You Need to Know New to Golfing? 4 Etiquette Tips You Need to Know
Entertainment3 weeks ago

New to Golfing? 4 Etiquette Tips You Need to Know

Golf is a sport that is governed by some very specific etiquette rules. If you are just taking up golf,...

How to Manage Scoliosis In Adult Period How to Manage Scoliosis In Adult Period
Health3 weeks ago

How to Manage Scoliosis In Adult Period

We always start thinking about our health, and the importance of it, once something goes wrong. When that inevitably happens,...

Simple Ways To Stay Warm This Winter Simple Ways To Stay Warm This Winter
Lifestyle3 weeks ago

Simple Ways To Stay Warm This Winter

You shouldn’t have to compromise on style for warmth, which is why we have put together this guide on how...

Staying On Schedule When Traveling With Family Staying On Schedule When Traveling With Family
Travel1 month ago

Staying On Schedule When Traveling With Family

There is a lot of planning that goes into traveling with your family, especially if you are trying to stick...

Do You Need A Lawyer When Filing For Divorce? Do You Need A Lawyer When Filing For Divorce?
Lifestyle1 month ago

Do You Need A Lawyer When Filing For Divorce?

Since divorce is a relatively common legal proceeding, some couples opt for a DIY approach. They decide to download the...

Unique First Home Gifts For Your Loved Ones Unique First Home Gifts For Your Loved Ones
Lifestyle1 month ago

Unique First Home Gifts For Your Loved Ones

If one of your loved ones is moving into their first home, we have the perfect gifts for you. Each...

Should Your Business Offer International Shipping? Should Your Business Offer International Shipping?
Business2 months ago

Should Your Business Offer International Shipping?

In today’s world, many businesses have the opportunity to reach a global audience and find new ways to grow. But,...

Why Isn't Your Company Website Seeing Traffic? Why Isn't Your Company Website Seeing Traffic?
Marketing2 months ago

Why Isn’t Your Company Website Seeing Traffic?

Are you hooked? Do you check your website’s Google Analytics frequently, only to be disappointed every time you see it? ...

Resources and Assistance For The Parents Of Children With Autism Resources and Assistance For The Parents Of Children With Autism
Education2 months ago

Resources and Assistance For The Parents Of Children With Autism

Raising a child with autism can be a challenge. For most neurotypical people (i.e., those who do not have autism),...

How to Improve Your Company Parking Lot Safety For Your Employees How to Improve Your Company Parking Lot Safety For Your Employees
General2 months ago

How to Improve Your Company Parking Lot Safety For Your Employees

When your workers park in the corporate lot, you want them to feel comfortable and protected. Your staff shouldn’t have...

Legacy Application Modernization – The Enterprise Perspective Legacy Application Modernization – The Enterprise Perspective
Tech2 months ago

Legacy Application Modernization – The Enterprise Perspective

The global application modernization services market size is expected to grow from USD 11.4 billion in 2020 to USD 24.8...

What You Need to Know Before Sending Important Packages What You Need to Know Before Sending Important Packages
General3 months ago

What You Need to Know Before Sending Important Packages

Many of us have at least once in our life faced the task of sending something to another city or...

4 Most Efficient Drainage Systems For Flat Roofs 4 Most Efficient Drainage Systems For Flat Roofs
Home Improvement3 months ago

4 Most Efficient Drainage Systems For Flat Roofs

The matter of drainage is the essential function of your roof. In fact, the very shape of a roof (a...

Google Algorithm Updates to Expect by The End Of 2021 Google Algorithm Updates to Expect by The End Of 2021
Business3 months ago

Google Algorithm Updates to Expect by The End Of 2021

Google’s algorithm updates tend to come with a lot of uncertainty and questions, and getting ahead of them is the...

Categories

Archives

Trending