The self-assessment tax deadline is quickly approaching and you may be wondering if there is any way to reduce the amount of tax you owe to HMRC. Fortunately, there are several allowances and deductions available that you may be eligible to claim. In this blog, we will explore a few examples of these allowances and how they can help you lower your tax bill. Don’t miss out on the opportunity to potentially reduce your tax burden – make sure to check if you’re eligible to claim any of these allowances.
Do you run your own business?
If you are self-employed and operate your own business, you can claim expenses on things that help you run your business. These include things such as stationery, office rental, a portion of utility bills, professional fees and other costs associated with running your business. Additionally, you may be able to claim capital allowances for the purchase of business assets, such as computers, furniture, or vehicles. Finally, you may be able to claim tax relief on employee expenses, home office expenses, professional subscriptions, training courses and others. As a self-employed business owner, you should be aware of all the expenses that you can claim in order to maximise your tax savings.
Are you married?
The Marriage Allowance scheme enables couples who are married or in a civil partnership to share tax relief. 10% of the personal allowance of one partner, whose earnings must be below the personal allowance, is donated to the other partner who must be a basic-rate taxpayer. This means that the basic-rate taxpayer has a larger personal allowance, which can save them approximately £250 per year.
Rent a Room scheme
The Rent a Room scheme was introduced in the UK in 1997 by the government to encourage people to rent out a spare room in their home. The scheme allows homeowners to earn up to £7,500 in rental income each year without having to pay tax on it.
The UK introduced Gift Aid in 2000 in order to encourage people to give more to charity. Gift Aid allows charities to claim back basic rate tax from the government on donations made by individuals. This means that a charity can claim an additional 25p for every £1 donated. This extra money helps charities to provide vital services to those in need.
Gift Aid is available to all UK taxpayers who make a donation to a charity that is registered with HMRC. This means donations to certain types of organisations, such as political parties and trade unions, are not eligible for Gift Aid. Higher rate taxpayers (40% or 45%), can claim the difference between the higher rate tax and the basic rate tax (20%) on the total gross value of their donations and claim it as a tax relief.
In conclusion, it’s important to be aware of some of the tax reliefs available to you in order to reduce your tax burden. While some tax reliefs, like Marriage Allowance, are well-known, there are others that may not be as widely known but can still make a significant difference to your tax liability. It’s worth taking the time to familiarise yourself with these tax reliefs and see if you qualify for any of them.