UK Tax Tips: Maximise Your Refund This Year
On behalf of Brand Shop, I'm excited to share some valuable insights on how you can maximise your tax refund this year. Navigating the UK tax system can be daunting, but with a few strategic moves, you can ensure you're getting the most out of your tax return.
Understanding Tax Allowances
The personal allowance is the amount of income you can earn each year without paying tax. For the current tax year, this amount is £12,570. Ensure you're fully utilising this allowance, especially if you have multiple sources of income.
The marriage allowance can also be beneficial. If you or your spouse earn less than the personal allowance, you can transfer up to £1,260 of your personal allowance to the higher-earning partner, potentially saving you up to £252 in tax.
Claiming Expenses
If you're employed, you may be able to claim tax relief on certain work-related expenses, such as travel costs, uniforms, and professional fees. Keeping detailed records of these expenses will make the claim process smoother.
For the self-employed, a broad range of expenses can be claimed, including office supplies, utility bills, and even a portion of your rent or mortgage if you work from home. Accurate record-keeping is essential to ensure you claim everything you're entitled to.
Charitable Donations
Donations to charity can also help reduce your tax bill. Through the Gift Aid scheme, charities can claim an extra 25p for every £1 you donate, and you can reclaim the basic rate of tax on your donation, increasing your refund.
Investment Reliefs
Individual Savings Accounts (ISAs) are a great way to invest tax-free. You can save up to £20,000 per year in an ISA, and any interest, dividends, or capital gains earned on these savings are tax-free.
The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) offer significant tax reliefs for investments in qualifying startups. These schemes are designed to encourage investment in early-stage companies by providing generous tax incentives.
Using Tax Codes
Ensure that your tax code is correct. An incorrect tax code can result in paying too much or too little tax. If you've changed jobs, started receiving a pension, or have multiple sources of income, it's crucial to check your tax code.
If you're on an emergency tax code, you might be paying more tax than necessary. Contact HMRC to rectify this and potentially receive a refund for any overpaid tax.
Submitting Your Tax Return
Meeting filing deadlines is essential to avoid penalties. The deadline for paper tax returns is 31st October, while online returns are due by 31st January. Filing early can help you avoid last-minute stress and errors.
Consider seeking professional help. Tax advisors can provide tailored advice and ensure that you're claiming all possible deductions and reliefs, potentially increasing your refund.
Conclusion
By understanding and utilising these tips, you can maximise your tax refund this year. At Brand Shop, our goal is to provide you with the knowledge and tools to navigate the UK tax system confidently. Happy filing!
