According to Tax Saving Financial Experts at the FT Adviser (19/5/22) . There are six simple steps that people can take to reduce their tax bills and therefore save money, given the current soaring living costs and higher inflation.
- Checking your tax code for any changes (if you are employed) – don’t assume it’s been checked automatically
- Check if you are eligible for tax free childcare. In certain circumstances you can claim 20% of your childcare costs, up to £2,000 per child, so check your eligibility.
- Claim all your expenses (if you are self-employed). Keep your receipts and check if they are tax deductible.
- Pay into a pension (especially if you are self-employed) as contributions are tax deductible.
- Make sure that you are maximising your married persons allowance (or civil partnership allowance). Some allowances can be shared.
- Claim your Council Tax deduction of 25% (if you are a single person)
It’s not just tax saving tips that are being questioned either.
All aspects of taxes are now under the microscope as people are concerned about making their savings last longer.
Tax Saving financial experts at Pension Bee have recently criticised the Lifetime Allowance tax when pensions hit the current limit of £1,073,100. Whilst it sounds like a lot. At the current rate of inflation and with the limit continuing to be frozen for the foreseeable future, more and more pension savers are paying extra tax. This seems an unfair tax on people who have been disciplined enough to save into their pensions for years Pension Bee argue – and we agree.
Tax saving financial experts at The Money Advice and Pension Service are also concerned about rising costs.
Their concern is that savers will start to withdraw from their pension pots in order to cover rising costs. That will have a longer-term impact on their future income. Expect more analysis on this happening in the near future.