Brits have been given top tax tips from Tax Watchdog
Maximise your tax
Monday, 13 Mar 2006 16:13
As the financial year draws to a close, experts are urging consumers to make the most of their tax-free allowances and keep as much of their money from the Inland Revenue as possible.
A string of legal, tax-efficient schemes are available, but unless you use all of your allowance before April 5th, you are wasting tax gains.
"No one enjoys thinking about tax, but by taking a few simple steps you could make yourself some serious savings," said Bernard Oster, managing director of Tax Watchdog
"With the end of the tax year drawing ever closer now is as good a time as any to get tax savvy about your money."
To help consumers make the most of their tax allowances, Tax Watchdog has highlighted the following areas as needing the most attention.
Tax Codes - One tax code in eight is estimated to be incorrect. By getting this wrong you could be taxed far more than you should be. "We are discovering more and more of our clients are issued with incorrect codes. In many cases this has meant they have been paying too much tax. Although this will have been a mistake made by the Inland Revenue the onus is entirely on the tax payer to resolve the problem," Mr Oster explained.
Investments - ISAs - ISAs are free from income tax and capital gains tax, and up to £7,000 a year can be invested each year. "ISAs are quite simply one of the easiest ways for investors to take advantage of tax-free savings, however, if you are planning to invest in an ISA this year you will have to do so by the April 5th," Mr Oster noted.
Pensions - "The arrival of A-Day [April 6th] will generally go unnoticed by your average man on the street. Many of us are guilty of putting off saving for our pension, but it is worth remembering that by doing so you are not only contributing to saving for your retirement, but you are also able to attract tax relief," Mr Oster said.
"Someone earning £45,000 could claim an additional 18 per cent tax relief on contributions made to their pension pot. If they made a monthly contribution of £250, they entitled to claim additional tax relief of £57.60. This works out at being nearly £700 per year. You may also wish to think about setting up a family pension scheme for your children. Not only do the government make contributions but the growth is also tax free."
Charitable Giving People who regularly give to charity can take advantage of Gift Aid. This is a tax relief on money donated to UK registered charities. Any size of payment qualifies, and they can be regular or ad hoc. Gift Aid lets you to give more to charity and gives the charity a tax break.
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