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Legally Pay Lower Tax

You’re probably thinking to yourself, “This is too good to be true.” That’s all right. That’s what I’d think as well! Nonetheless, there are perfectly legal ways for people to reorganise their finances and pay less tax. Let’s take a look at some strategies to legally pay lower tax.

Legally Pay Lower Tax – Pension Payment Tax Relief

Depending on your tax rate, most payments to employment pensions should be tax deductible. As a result, 20 percent should be added automatically at source, meaning you only pay £80 for every £100 you put into your pension. If you pay a higher rate of tax (40 percent), you may be able to get this money back.
As a result, the more money you put into your pension (up to a certain point), the less tax you may have to pay. Plus, when you retire, you’ll most likely have a larger pension pile, which is always a nice thing!

Options For A Couple

You don’t have to pay income tax unless you earn more than the Personal Allowance of £11,850. Expect the amount to rise with each passing tax year since the government may increase it more. If you make this much or less and are married, you can give your partner a portion of your tax-free allowance.

It’s known as the Marriage Tax Allowance, and it’s available to couples who are married or in a civil partnership. You can transfer 10% of your personal allowance to the higher earner if one of you earns less than £11,850 and the other earns less than £46,350. The allowance is valued up to £238 for this fiscal year. You can claim back taxes for the previous three years.

Legally Pay Lower Tax – Make The Most Of Your Property

If you rent out your extra room, you can earn £7,500 per year tax-free. If you earn more than this, you will be required to pay tax.

Not All Earnings Are Taxable

For example if you earn under £1000 a year on eBay. Also, dividends as a director can be declared as such, attracting a lower tax rate of 7%. Gambling winnings are not considered taxable income. This isn’t to say you should throw your money away. Instead, consider matched betting, which allows you to earn money without taking any risks by taking advantage of incentives from bookmakers. Many people make a full-time living this way, and none of it is taxable.

Self Employed? Check Your Expenses

All expenses can be deducted from your profit for a tax year, meaning you lower your tax bill. Ensure you claim for everything you are entitled to. 

 

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