It’s an old joke: the only certain things are death and taxes. While you can’t avoid them, you can get back more on your returns by showing due diligence and doing your fair share of research. You have likely paid a lot more taxes than you needed to, and finding out where you can save is the only way to get your money back. With these simple ways to save money and get a bigger return, you can reduce stress about money and have more fun with what you have.
Finding Tax Credits
There are many state benefits in the form of tax credits. These can provide extra returns for caring after children, disabled workers, and workers on low incomes. Two of the main credits you can get are working tax credit and the child tax credit. You should keep in mind, however, that you cannot claim these credits if you already receive Universal Credit. Even still, the scheme will pay out to those with low incomes.
Maximise your ISA Allowance
Using your ISA allowance is tax-free. For the 2018-19 and 2019-20 tax years, the annual limit is £20,000, which can be put in a cash ISA, a stocks and shares ISA, or a combination of the two. Furthermore, according to the specialists at the site Money Pug, which is used to find the best ISA interest rate, there is no Capital Gains Tax (CGT) to pay when you sell shares that you have in an ISA. Junior ISAs can also be used to avoid taxes on gifts you make to your children.
Tax Codes & Deadlines
Perhaps the most basic ways to make sure you are getting your full return is to check that your tax code is correct. If you don’t pay close attention, you may be using your code from prior years and that could be having you pay more than you should.
Another key way to make sure you’re getting your full amount returned is to submit them by the October 31st deadline if you make a paper return and January 31st for an online return. It is important to turn in paper returns three months earlier to avoid a fine.
Married couples and civil partners can transfer £1,190 of personal allowance from the lower-earning partner to the higher-earning partner. While this is only available is the higher earning person is a 20 percent taxpayer, no transfer is possible if they’re a 40 percent payer. Still, up to £1,250 can be transferred in the tax year 2019-2020.
Pay Less if you’re Self-Employed
If you are self-employed there are benefits you should be taking advantage of. Don’t forget to claim your deductible expenses, including cash expenditures where you are eligible. Another way to save on your taxes is to claim the running costs of a car. While you are not allowed to deduct the cost of buying a vehicle, even if you use the car for private and personal activities you can claim a portion of total costs.
As a business owner you have the ability to choose when the accounting year ends. Choose carefully, selecting a year-end date earlier in the tax year will give you more time to pay taxes on your profits. This means that as your profits increase, your taxes will as well. The more time you have, the less likely you are to have fines for late assessments. Self-employed workers should be mindful of these and other benefits.
Save on Property Taxes
If you rent out a room, you can receive up to £7,500 tax-free in rent each year. However, this only applies when you rent out furnished accommodations in your home. Additionally, if two people share a property they can only claim half. To get this break, however, you will need to live inside the house. You can’t simply own it and receive benefits without living there.
Replacement of domestic items is also a claim for landlords, allowing you to claim tax relief on money spent to replace those items. You can claim beds, carpet, crockery, sofas, curtains, fridges, even cutlery. But it should be noted that these items would need to be bought to replace others, you can’t claim them if you are buying something for the first time.