Tax

Our UK taxes help to pay for some really important things, like hospitals and schools. But it’s a good idea to know what you should pay – and what you shouldn’t so that you don’t pay more than you need to.

Because taxation can be a complicated area of personal finance, you can easily miss opportunities to reduce the amount of tax you pay if you don’t take tax advice. It can be puzzling to know what you do and don’t have to declare for income tax purposes!

Your job, your savings and your family’s circumstances can all have an impact on the amount of income tax you should pay each year. For example, any savings interest you get that is not in a tax sheltered investment needs to be declared on your income tax return as taxable income. On the other hand, up to £250 of charitable donations is tax deductable – so it’s worth keeping track of your donations, even though they may only be a couple of pounds popped into a charity box.

There’s also no personal tax due on any money you put into an ISA. Planning ahead, it’s also good to make sure your family receives as much of your estate as possible, rather than paying unnecessary Inheritance Tax at 40%.

Find useful tax advice

Many things need to be included in your annual tax return, whether you’re employed, self-employed or running a business. Tax advice from an accountant or independent financial adviser (IFA) could help you find more tax efficient ways to manage your financial affairs. Tax benefits and levels may of course vary as a result of statutory change and the value of tax benefits will depend on individual circumstances.