1. Check your Tax Code: Just about every adult has a tax code. Your code will consist of one letter and a series numbers. Multiply the numbers by 10 and this will show you how much you can earn a year before you pay tax. HMRC often get tax codes wrong.
2. Tax Rebates: If you have ever had an Emergency code, there is a possibility that HMRC owes you a refund. Many people are unaware that they can claim a refund.
3. Transfer savings/investments to your partner: if you are a couple, and one of you is in a lower tax band, you could transfer savings/investments from the partner in the higher band to the partner in the lower band. This may help you reduce your overall tax bill.
4. Plan for IHT: Inheritance Tax is potentially the most costly taxation. It’s therefore surprising that few people try to reduce their IHT burden. Simple steps like making a Will can drastically reduce an IHT bill.
5. Personal allowances: If your partner does not earn, or earns less than their personal allowance, you should consider moving any income generating assets into their ownership. They will still qualify for their personal allowance, so making use of this could save you tax.
6. Tax Efficient Savings: ISA’s are a great way to reduce your tax, and help you provide for your future. Use your annual ISA allowance for both you and your partner as any gains are tax free.
7. Self Assessment: If you receive a self-assessment form, you must complete it. If you get your return in by the end of October, HMRC will calculate your tax for you. However, if you miss the 31st January deadline, you will automatically be fined £100.
8. Use your Pension: Pension contributions are exempt from tax. This means that you can reduce your income tax bill by putting extra cash into your pension. You will receive tax relief at your highest rate of tax.
This article is for information purposes only and should always take advice before making any changes. Midlands Investment Agency are authorised and regulated by the Financial Services Authority