Filing an online return is a process which frustrates many Brits year after year as they look for ways to simplify the process and potentially save money.
However, according to pension and investments provider NFU Mutual, numerous taxpayers could be losing out on pension tax relief.
With the deadline for filing online tax returns fast approaching, now is definitely the right time to make the most of tax rules and ask for your tax return.
Personal finance specialist at the Mutual, Sean McCann, has given some tips to Brits looking to save money on their taxes by making the most of current legislation.
“Between now and the end of the tax year there are opportunities for people to get their finances in order and make the most of tax rules and legislation which could lead to some substantial savings,” said McCann.
According to McCann, many higher rate and additional rate taxpayers are missing out on the full 40% or 50% tax relief on their personal pension because they don’t include it on their tax returns. His tip is to backdate your claim for tax relief on pension contributions made up to four years ago. “This is a simple way to claw back the tax owed to you.”
Taking money out of an investment
Tax implications involved in investments demand a “closer look at their finances to make sure they’re making the most of tax opportunities”. McCann reminds people that the impact of Capital Gains Tax can be minimised if families – particularly married couples – use their individual tax entitlements effectively.
Giving money away
Some gifts can be made without paying any tax at all. In fact, everyone is entitled to give away a total of £3,000 each tax year completely free from inheritance tax. Any unused aspect of last year’s entitlement can be carried forward too. Therefore, McCann advises you to combine both this year’s and last year’s entitlement to give away a more substantial sum.