The cost-of-living crisis has been difficult for many, however there are ways to make sure you are being as tax efficient as possible, and only paying the tax that you need to – not a penny more and not a penny less.
Below you will find 5 ways of ensuring you are saving on tax wherever possible!
- Make the most of your marriage allowance!
If you’re married, you could benefit from the marriage allowance. In simple terms this means if you pay the basic rate of tax which is 20% and your partner earns less than £12,570, then they may be able to transfer some of their personal allowance to you.
A partner earning under £12,570 can transfer £1260 to their spouse.
To do this you must be married or in a civil partnership and both born after 1935.
The partner gaining the additional tax allowance must pay 20% tax, and not the higher tax band or additional tax band.
- Check if you are entitled to council tax reductions
Whilst council tax has risen in recent years, it is possible that you may be entitled to a reduction or rebate.
The council tax reduction is available to those who are low earners (earning less than £95 per week) or claiming benefits, however other factors are also considered such as where you live, income, if you have any dependents and your residency status.
On the other hand, the council tax rebate was only recently implemented, as a result of the cost-of-living crisis. To qualify for the rebate worth £150 you must:
- Own a home within tax bands A-D,
- Have paid council tax on your main home 1st April
You may also be entitled if you are a student, have a severe mental impairment such as Alzheimer’s or Parkinson’s, or have an annexe where a dependent relative lives.
- Could you claim back childcare costs?
Did you know you may be eligible to claim back up to £500 every three months, per child, to help cover the cost of childcare? Additionally, you could also be entitled to up to 30 hours of free childcare a week (during term time), if your child is aged between 3 and 4.
Eligibility depends on you & your partner’s income, child’s age, immigration status and childcare provider.
- Check your tax code
Many people are overpaying tax simply because their tax code is incorrect. If you think your code could be incorrect, it may be worth calling HMRC to double check, as it may take HMRC many months to realise you have been overpaying, and therefore then issue you rebate.
Additionally, if you think you may be underpaying on tax, it may also be worth investigating. Although many people may not want to pay more tax, it is important to pay the correct amount, as otherwise you may end up with an extra fine from HMRC.
- Have you overpaid on tax?
If you are a PAYE employee, however, also find yourself paying for your own work-related expenses you could be entitled to a rebate for the tax you have paid on these expenses. If you travel for work and pay for our own fuel or public transport, accommodation, tools, training, uniform, laundry, stationary or anything else for work, you could claim back the tax on these costs, as well as other costs.
If you would like to explore a tax rebate, our sister firm Taxbuddi can help you to investigate this, and whether you could be owed thousands. If you have been employed in the past 4 years, travelled for work and earnt over £18,000, a rebate could be on its way to you.
