In the UK, the tax we pay helps to fund things we will all rely on at some point, like schools and the NHS. While it’s important we all contribute towards taxes, it’s a good idea to understand what you should be paying and what you shouldn’t – as you don’t want to end up paying more than your fair share!
Taxation can be a complicated area of personal finance, so it can be easy to miss out on opportunities to reduce the amount of tax you pay if you don’t take tax advice. Your job, your savings and your personal circumstances will all have an impact on the amount of income tax you should pay each year, so it’s important to know what you do and don’t have to declare!
Any interest earned on savings you have in an ISA, for example, will not be taxed, but interest you earn on money that is not in a tax sheltered investment will need to be declared as part of your taxable income.
You should also make sure you understand how taxes like capital gains tax and inheritance tax could have an impact on you. Getting financial advice to help you plan ahead could help you to manage your finances in a more tax-efficient way. An independent financial adviser or an accountant will also be able to help you with your annual tax return, and they’ll inform you of any changes in the tax law that may affect you. To find one in your local area click here.
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