Planning your taxes

Planning your taxes

When it comes to taxes, whether it’s income tax, corporation tax, or VAT, it is wise to ensure you aren’t paying more than you need to. Taxation can be very complicated and the rules, reliefs and allowances often change, so it’s important to make sure you are aware of the current laws to make sure you can manage your personal finances in a tax-efficient way.  By understanding how taxation works you should be better prepared to manage your finances, and could end up saving money in the long run.

In the UK, the tax year runs from 6 April through to 5 April.  During this time the government requires everyone to pay an appropriate level of income tax on their earned income, which helps to pay for things like education and healthcare.  As well as income tax, you could also be liable for capital gains tax on profits you make from any chargeable assets you have sold, or for tax on gifts you have made during your lifetime.  If your estate is over a certain value when you die, it will also be subject to a tax, known as inheritance tax.

Tax planning is best done with the help of a financial adviser or an accountant. They will be able to help you plan your taxes in advance, and come up with effective strategies that will use the lawful reliefs and allowances to minimise the amount you have to pay.  They will usually assess your financial situation, and look at your financial goals to help come up with a suitable strategy for you. You can find a local financial adviser or accountant here.

You can also try out our useful tax waste calculator to see how much you could be wasting in tax and where an IFA may be able to help you become tax efficient.

Questions you might like to ask an IFA or accountant…

  • If I’ve been paying too much tax, can I get it back?
  • How can I plan to reduce the taxes I have to pay?  
  • What income tax rate should I be paying?

You should also consider

The adviser checklist

Take a look at our guide to help you shop around and find the right adviser for you

Adviser qualifications

You can use our guide to financial adviser qualifications to help you find an adviser with the right qualifications to help you

How to pay for financial advice

Read our guide to find out about the different ways you can pay for financial advice