Tax season is approaching fast and here are the simplest ways to reduce your tax on your income.
Tax Code
Your tax code indicates how much tax HMRC will collect from your salary. You can find it on your payslip.
Check your tax code each year, or after changing jobs, to make sure it's correct for your situation.
If you're using the wrong code, you may be entitled to pay less tax in the coming months or receive a refund for previous years.
Claim tax credits
Tax credits provide extra money to those looking after children, disabled workers, and other workers on low incomes.
The two main types you can claim working tax credit and child tax credit.
Pay into a pension scheme
Contributions to your employer's pension scheme (including any additional voluntary contributions you make) can be made from your gross pay before any tax is charged.
The government will top up your pension with tax relief, giving you a free bonus for saving for retirement.
Benefit from marriage allowance
The marriage allowance is a tax perk that benefits couples where one partner earns less than the personal allowance.
If you're married or in a civil partnership, you can transfer 10% of your personal allowance from the lower-earning partner to the higher-earner, equating to £1,260 in 2022-23.
This will save you up to £250 in tax as a couple. To qualify, the higher earner must be a basic-rate taxpayer.
Meet the tax return deadline
If you're one who needs to submit a self-assessment (SA100) tax return, make sure you don't miss the deadline - it's a costly and easily-avoided mistake.
For online submissions, you have until 31 January 2023 to send in your 2021-22 return. But if you want to file on paper, you'll need to submit it by 31 October 2022.
Miss the deadline and there's an automatic £100 fine - even if you don't owe any tax. After that, it's £10 a day, until you reach to £1,000 cap, and there are additional penalties if your submission is six or 12 months late, and if you haven't paid your tax bill on time.
Contact our outsourcing professional at sales@xlkpo.com or call +44 208 191 1010 for any tax or outsourcing-related questions.
