How you can reduce your tax bill
Tax is a part of life, like the weather, wasps and the common cold. We don’t necessarily like it but we have to pay it.
As an employee in a company, tax payment is automatically deducted from your monthly salary.
However, as a business owner it is necessary to complete a self-assessment form, and then receive a bill for the tax owed.
There are however means of reducing your tax bill, legally, by taking advantage of the tax-free reliefs and allowances.
These can include income from savings or dividends, capitals gains and income tax allowance. For those who are self-employed it is possible to reduce your tax bill through tax-deductible expenses such as fuel, phone costs, home-office running costs and car running costs.
Additionally, if you rent out a room in your home it is possible to earn an extra £7,500 per annum tax free.
There are further tax relief options on pensions as well as ISA savings so the more money you can plough into these schemes the more you can reduce your tax bill.
For the higher earners, there are further Enterprise Investment Schemes and Venture Capital Trusts which can invest in small high-risk firms which is a popular form of tax relief.
There is also a marriage allowance for those married or in a civil partnership, where one partner is earning below the personal tax allowance. They can then transfer any unused allowance to the other partner, reducing their tax bill.
Being aware of all the extra tax reliefs and allowances can take a lot of research, and there are a lot of conditions and clauses to take into consideration. However, a professional chartered accountant, such as the team at Nigel B. Butler Limited can guide you through the mine-field of tax legislation and reduce your tax bill. Why not give us a call to find out how much we can save you?