With the increase in the pandemic alerts and restrictions there are various things prevailing in the economy and affecting it drastically. The consequences have shook the economy and raised alarms and concerns about the finances and health and most of all the job security has also increased. Business owners and the entrepreneurs are highly responsible for the time tax payments on the revenue they have generated by their business. It can be a large amount even so they still need to look out for deductions and exclusions to minimize their tax flow. A few tips and tricks are there, if followed might help any one who is self employed or an employee or a landlord or even an investor to bring more pounds by cutting the tax bills.
First is to maximize the personal savings allowance. If the person is a basic rate tax payer then they will receive 1,000 Euros interest on the savings tax free. The tax free allowance if falls under the higher rate tax payer band, is 500 Euros. And any income that exceeds this limit will be taxable. Now that it won’t be deducted by the savings provider anymore. The payment needs to be done by the self assessment or have it removed with the help of PAYE if the taxes are due. There might be a chance of not having a savings allowance as an additional rate taxpayer i.e. 45 per cent. A smart thing to do is transferring a part of your assets to your spouse or a civil partner, by doing so you can get an exemption from paying the capital gains tax. SO it is advisable to transfer the savings and the investments to your husband or wife, if they are low tax payer compared to you. Ensuring that the submissions with the HM revenue and Customs are sent and paid on time. If things do no work out they you want or it is not the way you want it to be, it may not be this straightforward always but making sure to talk to the advisor and come up with some possible ways to buy some time to deal with the situation is the best thing as it helps you avoid certain fines or interest which you may have suffered because of the delay. The profit earned from the sale of the investments like art and antiques or second houses is called as capital gains and about 12,300 Euros of capital gains were tax free in the year 2020-21. Couples who hold properties jointly can avail an allowance of 24,600 Euros. You can also claim tax free childcare about 25 percent of it and save up to 500 Euros provided you meet few conditions set. If you are self-employed you can claim the operating costs of the car you use for the company purposes. But only a certain amount can be claimed if the same vehicle is used for personal purposes too. Like claiming a fixed rate mileage allowance for work travel.
This year, UK citizens stayed back their house to help fight the pandemic and that indicated that majority of the people had to work from home, this meant that an extra claim could be made on home expenses, for example, the bills for heating or electricity rising due to working at home and the money spent on that could be saved. And to conclude, if there is still uncertainty about paying taxes it is better to have a chat with the tax advisor and be best informed to be optimized and secure your wealth for the long term.