Tips to Help Minimise Tax Liability

No one likes paying tax, but it's something we all have to do. But paying more tax than you should pay is just being careless. That's why we help individuals and businesses across Hampshire and Surrey in minimising tax liability.

Remember, there is a big difference between minimising tax liability and tax avoidance. While tax avoidance is a crime, reducing your tax liability simply means you are only paying what you are legally required to pay and nothing more.

There is no point in overpaying your tax bill, and that's where we can help. So how exactly can you make savings on your tax? Here are some of the main areas where we can help.

Income Tax

When it comes to personal tax planning, one of the main areas we help with is income tax. To ensure you don't pay more than you should, you need to have a tax strategy in place.

Ensuring you keep your tax liability to a minimum starts with knowing about the expenses that you can claim if you are self-employed. For example, if you work from home, you can deduct reasonable costs like heating, insurance, council tax and more. However, there are rules around exactly how much you can deduct, which is where professional help is useful.

As another example, if you rent a room in your property (perhaps through Airbnb), you can earn up to £7,500 a year after expenses and not declare it under the rent-a-room scheme. There are many ways like this you can save money, and we'll be happy to help you.

Inheritance Tax

Depending on the size of your estate, inheritance tax can add up to a significant amount of money when you pass away. Clearly, many people want to make sure that as much of their money goes to their loved ones as possible rather than the taxman.

Fortunately, there are ways that you can plan your estate before you pass away to reduce your tax liability. However, this is a complex area, and it's something we recommend you talk to a professional about to start planning as soon as possible.

Allowances

When minimising tax liability, there may be a number of allowances that you can take advantage of. One of these, for example, is the marriage allowance. Did you know that you could save hundreds of pounds with this allowance if you are married?

This can be used where one person in the couple is a low earner and they earn less than their personal allowance (currently £11,850). In this case, they can transfer £1,190 of their allowance to their partner, which is worth £238 a year. However, it can be backdated to the previous tax year to save even more. Find out more about the Marriage Allowance here.

Charity Donations

If you are a higher-rate taxpayer, you may be able to save some money on your tax bill if you have made charitable donations during the year with gift aid, as explained here. You can claim back 20% of your donations including gift aid, which could potentially save you a significant amount of money.

Other Ways to Save

These are just the start when it comes to saving money on your tax bill. In addition, there are ways you may be able to minimise your tax liability with:

1. Capital gains tax
2. Non-domicile tax
3. Uniform costs, mileage allowances and professional fees

You may even be able to change your tax code if it has not been updated following a change in your situation, which may mean you are currently paying too much.

Only Pay What You Need To

When it comes to taxes, it's important that you only pay as much as you need to. While you will want to make sure you pay all the tax you legally should be, there is no need to overpay. If you want to find out about minimising tax lia