Tips to help save tax and penalties from Tax
1. Be aware of your Tax Situation. Learn a bit about taxation it may save you money over the years. Don’t put off looking into tax, even if you dislike the ida.
2. ISA Accounts. Interest you receive is generally liable for taxation unless you save in an ISA. So save in an ISA, up to £3000 each tax year can be saved, you can get instant access, a good rate of interest and don’t have to give a % to the tax man.
3. Gross Interest. Because interest received is generally taxable the tax man has arranged to take his cut before you get your interest. Banks and building societies take tax off your interest automatically. If you have low income or don’t pay income tax then register with your bank to get ‘Gross’ interest – that is interest with out tax.
4. Ask For Refund. If you haven’t registered for gross interest or think you have paid too much tax then ask your tax inspector for a refund at the end of the tax year 5th April.
5. Share Personal Allowances. Everyone has a personal tax allowance. This is the amount of income you can have without paying any tax. Make sure any interest received is paid to the partner with unused allowances.
6. Check Tax Code. The Inland Revenue make lots of mistakes so check you tax code. This is used by your employer to calculate how much tax to deduct form your wages. Guidance is available on www.hmrc.gov.uk understanding your P2 PAYE Coding Notice.
7. Changed Circumstances. If your circumstances have changed since completing a tax return tell the revenue.
8. Special Tax exemptions. There aren’t many special allowances or expenses but professional subscriptions, union agreed trade allowances and some ex-gracia expenses are allowed against tax if you claim them.
9. Avoid Penalties. Send in you tax return promptly and avoid penalties. If you do get a penalty, contact them to ask for a refund, perhaps it got lost in the post.
10. Sundry Income. Sundry income from Ebay or auction sales for example is not taxable if you are just having a one off sale but is taxable if you are running a business or getting regular income.
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