Tax planning news
Free yourself from unnecessary tax
30 May, 2007
The beginning of June normally marks the lead up into summer, but it is also national Tax Freedom Day – the theoretical point in the year at which we stop working for the government and start working for ourselves
With this in mind, why not put your Friday afternoon procrastination to good use and make sure that you join the nation in resolving to reduce the amount of tax you pay each year, after the latest statistics show Brits overpay by a massive £7.9 billion each year.
David Elms, chief executive of unbiased.co.uk said: “Tax Freedom Day is a key date in any UK taxpayer’s diary as it highlights just how much we pay into the taxman’s pockets each year. But there are many ways in which we can reduce our tax liability. Why not find an independent financial adviser in your area, who will be able to review your financial situation to ensure you only pay the tax you have to!”
Find out how much your home is worth
Almost a third of Brits resent rising tax bills, however three quarters haven’t actually bothered to do anything about it – even though reducing it is only a matter of taking a few simple steps.
Sorting out your Inheritance Tax (IHT) plan if your assets are worth over £300,000 is the best place to start as this will have the most impact. Most of the wealth contained in an estate is lost due to inadequate life assurance and the absence of a Will.
Another way to avoid paying unnecessary tax is by putting your savings into a tax-free ISA, automatically recouping the money that would have been lost in an ordinary savings account – and getting a better rate of interest at the same time. A huge £382 million in tax could be avoided by sheltering investments in ISAs, or moving savings from an ordinary deposit or savings account to an ISA.
Find out how your pension is performing
Make sure you claim your tax credits if you are eligible for them, fill in your tax return in good time whilst making sure you are doing so correctly – missing the deadline will incur a £100 penalty – and use your Capital Gains Tax (CGT) allowance efficiently, transferring assets between yourself and your spouse if appropriate.
Finally, if you give to charity make sure that you get Gift Aid – which will cost you no extra but allow the charity to claim the tax payable back from the Government, and if you have a Child Trust Fund (CTF) voucher then make sure that it is invested.
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