Some people prefer to give money to the taxman – but there are a few ways you can reduce the amount you pay, and they’re perfectly valid.
By understanding all the different perks and plans available to you, your tax bill And save you thousands.
This week we covered several ways to lower your energy, childcare and tax bills tricks to increase budget,
Here, we round up some of the easiest ways to pay less. hmrc,
check your tax code
First, check that you are paying the correct amount of tax.
Your tax code Indicates how much you will hand over the revenue – you can find this on your payment slip.
The standard tax code for basic-rate taxpayers is 1257L, which means you can earn £12,570 a year before paying taxes (you can multiply your code by 10 to find out what your personal allowance is) Is).
If it’s false, contact HMRC on 0300 200 3300 – you could get thousands off.
It is your responsibility to tell HMRC if your tax code is incorrect, so be sure to check it each tax year and especially if you change jobs or receive a pay increase.
pay in pension
The money you save for retirement offers tax relief, effectively giving you a free boost to your savings pot.
20% relief to basic rate taxpayers This means for every £1 you put into yourself pension Pot only really costs you 80p.
Paying extra in pension is an especially good idea if you’ve just taken the lead. High rate tax band . In,
Those earning more than £50,000 pay a 40% tax on this portion of their salary.
So if you make £51,000 per year, saving £1,000 in your pension will effectively put you back in the basic rate tax band.
This means you only pay the standard 20% tax on your earnings, and the £1,000 put into your pension gets 40% tax relief.
Make good use of marriage allowance
married couples Could use an allowance that would save them a few hundred quid each year.
Each year, workers can typically earn £12,570 (known as a personal allowance) before they start paying any taxes.
If a married couple is earning less than half of this amount, they can transfer some of their remaining allowance to their higher-income spouse.
In the current 2022/23 tax year, you can transfer up to £1,260, effectively saving your partner £252 on your tax bill.
In addition to this year’s allowance, you can also backdate it to the last four tax years, so you could potentially get back more than £1,200.
Unfortunately, if you are living together but you are not married or in a civil partnership, you cannot claim marriage allowance.
You can use the government to find out how much you’ll get marriage allowance calculator,
Rent a spare room, shed or driveway
The growing popularity of home-sharing websites like AirBnb means more people can take advantage of rent-a-room relief.
This is a government scheme through which you can earn up to £7,500 per year renting out space in your home Without paying any tax.
This can be a spare room for vacationers or a shed or garage for those who need extra storage.
Those who live near a train station or popular destination can also rent their own driveway.
How much you can earn will depend on where you live and the demand for your space.
But if you exceed the £7,500 limit, you must tell the tax authority.
stop paying national insurance
national insurance The contribution was increased in April and many workers may have noticed that more money is missing from their pay packets every month.
But according to whom could the old employees quit altogether?
If you continue working state pension Age – which is currently 66 years old – does not require you to keep paying.
To opt-out, you must tell your employer so that it can adjust your pay.
Doing so could save you thousands – under the current rate, earning £25,000 Pay £2,045 per year in National InsuranceAnd those earning £50,000 pay £5,357.
take advantage of work allowances
if your Employer provides certain benefitsThis can reduce your tax bill.
For example, railway passengers can apply for a season ticket loan from their company.
Your employer gives you the required amount for the annual ticket and you repay the loan in monthly installments through your wages.
Not only will this reduce the total cost of your trip, but with the money coming from your salary, you pay less tax.
a cycling plan to work Works the same way – you can get a loan for a new bike and pay the money through your salary.
And You Can Also Use Pay Sacrifice Plans buy an electric vehicle,
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