Four Perfectly Honest Ways To Save Money On Your Tax Bill March 18, 2016My MoneyOff

Because tax is such a fiddly business, many people won’t even bother making sure it’s right. In fact, over five million people are estimated to have paid their taxes wrong, so you could be missing out. In this day and age, money can be tight, so it’s important to make sure we aren’t overspending.

Believe it or not, but you can actually shave a bit of money off your tax bill, in numerous perfectly legal ways. Of course, the amounts will vary from person to person, but all it takes is a couple of hours to inquire into your situation. So, here are the four top things you should be doing if you suspect you may be able to cut some costs!

  1. Check your tax code

How often have you taken notice of your tax code? Probably not a lot, as I assume you’re more interested in the amount of money displayed on your payslip. If you’re on the wrong code, you may be paying too much tax. Or, on the other hand, you may not be paying enough! Conduct a careful inquiry into which category you fall into. Use a tax-code guide for more information on what your code means.

  1. If you’re self-employed, claim tax deductible expenses

If you work for yourself, many operating costs you use in your day-to-day life are tax deductible. For example, if you use a car, you can claim back the running costs (but not the initial purchase cost).

Other things like utility bills, office supplies and broadband can also be claimed back. However, if you use these things personally, you can’t claim it all. You can only claim a portion. So as a rough example, if you use your car 40% of the time for business purposes, then you can claim 40 percent of the running costs.

  1. Get professional advice

The thing about taxes is, there will always be somebody who understands them better than you. If you’re self-employed, have an accountant look through and sort your accounts; you could save money. Additionally, various tax attorneys may be able to advise you on certain tax deductions you could make. Conduct inquiries and you may be surprised at the areas you can cut back on.

  1. Marriage allowance for couples

Singletons aren’t the only people that can benefit from certain tax reductions; married couples can too. This marriage allowance is all based around your ‘personal allowance’. This is the amount of money you can earn before you start to pay tax. From April 2016, married couples can transfer $1,100 of their own personal allowance to the higher earning partner. You can save a couple of hundred quid a year by doing this. And maybe more.

So, there you have it. Tax can be tricky to handle, but with a small amount of savvy, it’s possible to cut back that expenditure. Don’t make all the wrong financial decisions. All it takes is a little bit of time to evaluate your situation, and you could save hundreds. Will it be worth it? Yes.

Photo by LD Prod | Shutterstock

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