First things first. When we talk about reducing your tax bill, we mean legally – there are no loopholes or tax evasion dodges in this list. There are, however, lots of smart ideas from our experts here at Ascent Financial Planning in North Wales, and we’d like to share them with you.

Before we continue with our tax planning advice, it might be helpful to know that taxation is just one aspect of our work at Ascent Financial Planning. We’d also be happy to advise you on everything from ISAs and savings to pensions and investments. But, in the meantime, here are some ways to legitimately reduce your tax bill.

Legitimate Tax Planning Strategies to Try

1. Make the most of your pension by maximising your contributions. Every £1 you put into a pension saves you at least 20p in tax, or 40p if you are a higher rate taxpayer. What’s more, salary sacrifice saves an additional 8% in NI. A higher rate taxpayer putting £10,000 into their pension through salary sacrifice saves £4,800 in tax and NI.
    
2. Make gift aid donations. These extend your basic rate band, which is particularly valuable if you are near the higher rate threshold or the £100,000 personal allowance taper.
    
3. Time your income (if you can). If you are able to time when you receive income, timing it to fall in a lower tax year can save thousands.
    
4. Make full use of your ISA allowance. The £20,000 annual ISA allowance means all investment returns, including dividends, interest and capital gains, are absolutely tax-free. This can save tens of thousands in tax over the course of your lifetime.
    
5. Use your capital gains allowance. The annual exempt amount is £3,000, and couples can combine theirs for £6,000 of tax-free gains.
    
6. Claim marriage allowance. If one partner earns under £12,570 and the other is a basic rate taxpayer. This transfers £1,260 of personal allowance, saving £252 per year, and you can backdate it four years for a total saving of £1,260.
    
7. Keep records of all allowable expenses. Some people overpay tax simply because they do not claim expenses they are entitled to.
    
8. Claim work from home allowance if you’re eligible. You can claim £6 per week (£312 per year) without evidence if your employer requires you to work from home, saving up to £125 per year.
    
9. Use your trading allowance. Remember, the first £1,000 of self-employment or side hustle income is tax-free under the trading allowance, good news for the many clients across North Wales running a small side business alongside their main job.
    
10. Think about salary sacrifice for benefits like cycle-to-work schemes, electric car schemes, or childcare vouchers. These reduce your taxable income.

We hope our list of strategies is useful, but, ultimately, the best bit of tax advice we can give you is to contact our professionals in North Wales. With their expert knowledge, they can tailor their guidance to your particular situation. That way you get personal tax planning. If you think our tax planning services can be of help, get in contact now.