Utilise your tax opportunities and fight the credit crunch

Thousands of people are failing to take steps to reduce their tax bill and help them survive the credit crunch warns insurer NFU Mutual.

Sean McCann, tax specialist at NFU Mutual says, "With inflation up and the credit crunch continuing to bite many people are looking for ways to alleviate their financial pressures.  In fact, there are basic steps that people can take to utilise their tax opportunities and save money."

Child tax credits
McCann says, "Many people are still unaware that they can claim Child Tax Credits from the Government as you have to actively seek it.  But you need to make sure you get what you are entitled to.

"The key thing to remember is that if you contribute to a pension this decreases your taxable income and may in turn mean you can qualify for tax credits."

Pensions
Many higher rate taxpayers do not claim the 40% tax relief on their personal pension as they receive only basic-rate tax relief of 20% automatically.  

McCann says, "This is an area where you can really maximise tax savings.  You can back date your claim for tax relief for up to six years, so at a time when belts are tightening, this is a simple way to claw back the tax owed to you."

Life insurance not written in trust
Some people are neglecting to put their life insurance into trust so when you die, it comes back into your estate and could be liable for 40% inheritance tax.  However, this can be alleviated as any existing policies can be put into trust.  McCann comments, "This measure can save a great deal of money so we recommend that people seek advice to ensure that they are not paying unnecessary tax."

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