Tax tips to avoid year-end stress

Many of us dread doing our tax return. We have some recommendations on how to make it as easy as possible.

Image Credit

New tax allowances

New tax-free allowances of £1,000 per year for trading income and property income will benefit eBayers and Airbnbers. Similarly, income under £1,000 from self-employment and casual jobs is tax-free.

Pension tax relief

If you pay tax at 20 per cent, no adjustment needs to be made, but additional-rate and higher-rate taxpayers must claim extra tax relief via their return. The rules for “Net pay” and “Relief at source” workplace pension arrangements differ.

Buy-to-let tax breaks

If you are a buy-to-letter and pay 40 per cent tax or higher, you can get relief on 75 per cent of your mortgage interest payments.

Image Credit

Avoid child benefit penalties

Families where one or both parents earn over £50,000 have seen their benefit clawed back. You can escape the charge by making more pension contributions.

Claim higher-rate gift aid

Giving through gift aid enables charities to claim an additional 25p for every £1 donated. If you pay higher-rate tax, you can use your return to claim the difference.

Reduce your tax bill with charity donations

With gift aid, you can claim relief on donations in the current tax year, so your donation now reduces your 2017-2018 tax bill.

In Cheltenham accountants include https://www.randall-payne.co.uk.

Which? suggests ways to save on tax at https://www.which.co.uk/money/tax/saving-on-tax/30-ways-to-save-on-tax-a18nb3s9144f.

Capitalise on your spouse or civil partner

You could benefit if you earned under £11,500 and your partner earned under £45,000 in the 2017-18 tax year. If their income exceeds yours, you can transfer £1,150 of your personal allowance to them to lessen their tax by up to £230.

Claim expenses

Claim newspapers and magazines for work and your work clothing as expenses.

Remember everything

Don’t omit income like investments and savings. Also note interest from loans, friendly societies and credit unions, and compensation payouts from payment protection insurance.

Avoid penalties

A fine of £100 is taken for all late tax returns. Further penalties apply after three months, six months and a year.

Have you registered?

Signing up for a tax return can take 20 working days. After you register, you will be posted an activation code so you can file your return online.

 

Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.