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MEGA THREAD - 25 Way to Save Tax 
Something for everyone covered in here!
RT's Appreciated
Something for everyone covered in here!
RT's Appreciated
1 - Use your Annual ISA Allowance 
Each year you can shelter cash and investments within an ISA to minimise your tax bill. The current ISA limit for the 2020/21 tax year is £20,000. You dont have to pay any tax on interest, dividends or profits from investments held in the ISA
Each year you can shelter cash and investments within an ISA to minimise your tax bill. The current ISA limit for the 2020/21 tax year is £20,000. You dont have to pay any tax on interest, dividends or profits from investments held in the ISA
2 - Personal Savings Allowance
Each year you can earn up to £1,000 per year in interest on your savings without having to pay tax on it. The allowance is reduced to £500 for higher rate taxpayers and zero for those in the highest tax bracket.
Each year you can earn up to £1,000 per year in interest on your savings without having to pay tax on it. The allowance is reduced to £500 for higher rate taxpayers and zero for those in the highest tax bracket.
3 - Check your tax code
If you receive income via PAYE then make sure you check your paying the right amount of tax through the right tax code. 1 in 3 people could be on the wrong tax code and that often means your taxed more than you should be.
If you receive income via PAYE then make sure you check your paying the right amount of tax through the right tax code. 1 in 3 people could be on the wrong tax code and that often means your taxed more than you should be.
4 - Share allowances with your Spouse
There is nothing stopping you from transferring any additional income that is likely to be taxed in a higher rate to a spouse who still has tax allowances remaining in the financial year.
There is nothing stopping you from transferring any additional income that is likely to be taxed in a higher rate to a spouse who still has tax allowances remaining in the financial year.
5 - Join your Employers Share Scheme
These schemes will reduce your taxable income, in exchange for shares under the scheme rules, and you will only be liable to CGT when you decide to sell the shares.
These schemes will reduce your taxable income, in exchange for shares under the scheme rules, and you will only be liable to CGT when you decide to sell the shares.
6 - National Insurance Contributions
If you work after the retirement age make sure you stop paying National Insurance
If you work after the retirement age make sure you stop paying National Insurance
7 - Generate capital gains rather than income
Currently the CGT rate is just 10% (basic and non tax payers), 20% (for higher tax rate payers) compared to equivalent of 20% and 45% respectively for income tax.
Currently the CGT rate is just 10% (basic and non tax payers), 20% (for higher tax rate payers) compared to equivalent of 20% and 45% respectively for income tax.
8 - Self employed relief
Make sure you claim tax relief on cost of running any car used for business purposes.
Make sure you claim tax relief on cost of running any car used for business purposes.
9 - Dividend Allowance
If you are a shareholder in a limited company make sure you use your dividend allowance. The dividend allowance currently allows you to earn up to £2,000 tax free.
If you are a shareholder in a limited company make sure you use your dividend allowance. The dividend allowance currently allows you to earn up to £2,000 tax free.
10 - Employ your spouse
Employing family members is an easy way for business owners to save on tax. (make sure they are actually working), but if they are you can deduct their pay as an allowable expense from your business profits.
Employing family members is an easy way for business owners to save on tax. (make sure they are actually working), but if they are you can deduct their pay as an allowable expense from your business profits.
11 - Marriage Allowance
Marriage allowance lets you transfer up to £1,250 of your personal allowance to your spouse if they earn more money than you, which reduces your tax bill up to £250.
Marriage allowance lets you transfer up to £1,250 of your personal allowance to your spouse if they earn more money than you, which reduces your tax bill up to £250.
12 - Claim Expenses
If you are self employed make sure you are claiming all your tax deductible expenses.
If you are self employed make sure you are claiming all your tax deductible expenses.
13 - Make Pension Contributions
These not only reduce your tax bill but help with your retirement fund. Pension contributions receive tax relief as your highest marginal income tax rate. Up to lower of 100% of earnings or £40,000
These not only reduce your tax bill but help with your retirement fund. Pension contributions receive tax relief as your highest marginal income tax rate. Up to lower of 100% of earnings or £40,000
14 - Consider tax incentive schemes
Such as the Enterprise Investment Schemes (EIS and SEIS) these offer generous tax breaks upon investment. They are high risk though, never invest solely for tax purposes
Such as the Enterprise Investment Schemes (EIS and SEIS) these offer generous tax breaks upon investment. They are high risk though, never invest solely for tax purposes
15 - Use annual Capital Gains Tax (CGT)
Everyone gets a Capital Gains Tax allowance yearly, currently £12,300 for 2020/21. This means that your can make £12,300 of gains without having to pay tax at all.
Everyone gets a Capital Gains Tax allowance yearly, currently £12,300 for 2020/21. This means that your can make £12,300 of gains without having to pay tax at all.
16 - Bed and Spousing
Similar to bed and breakfasting where you sell your shares in at the end of the tax year then buy them back the next tax year to utilize your capital gains tax allowance. But instead of doing this you get your spouse to buy the equivalent as you sell.
Similar to bed and breakfasting where you sell your shares in at the end of the tax year then buy them back the next tax year to utilize your capital gains tax allowance. But instead of doing this you get your spouse to buy the equivalent as you sell.
17 - Carry forward past capital losses
If you make an overall capital loss in any tax year, note it in your self assessment and carry that loss forward to offset any future gains that you might make.
If you make an overall capital loss in any tax year, note it in your self assessment and carry that loss forward to offset any future gains that you might make.
18 - Make a Will
Planning ahead using a will can mean when you pass your estate will be shielded from inheritance tax more than if you didnt have a will.
Planning ahead using a will can mean when you pass your estate will be shielded from inheritance tax more than if you didnt have a will.
19 - Get a council tax discount
If you are one of the following you are eligible for a discount: Children under 18, apprentices, 18/19 year olds in full time education, fully time college and uni students, people with severe mental disabilities, live in carers and diplomats.
If you are one of the following you are eligible for a discount: Children under 18, apprentices, 18/19 year olds in full time education, fully time college and uni students, people with severe mental disabilities, live in carers and diplomats.
20 - Check your council tax is in the right band
Your council tax is based on the value of your property, based on values back in the 90's, many properties have never been revalued, but you can challenge and ask for a revaluation. Beware though it could go up!
Your council tax is based on the value of your property, based on values back in the 90's, many properties have never been revalued, but you can challenge and ask for a revaluation. Beware though it could go up!
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