By Adeyemi Adisa - January, 27th 2014
It’s natural that we are all looking for ways to keep our money out of the taxman’s reach. I am yet to see people that willingly likes to pay the taxman more than their fair share of tax, even though millions of people are indirectly paying more than expected.
If you think you’re paying too much tax, the best thing to do is to find out how some of the money you are paying as tax could be legally kept away from the taxman in order to ease your tax burden.
Tips On How Not To Pay Too Much To The Taxman
Meanwhile, don’t ever think you can ease your tax burden by hiding, evading or dodging tax is hiding from HMRC behind your sofa, chances are you will be caught and probably end up jail.
But, luckily, there are easier, morally acceptable options that could save you money and spare you jail.
#1). Check On Your Tax Relief Entitlement
First and foremost, it’s very important to check if you are entitled to any tax relief. Around a quarter of a million taxpayers are missing out on the extra 20 per cent tax relief they are due. You can get this by simply writing to your local tax office.
#2). Check On Tax Claim Or Tax Refund
Tax refund will enable you to reclaim tax if you’ve overpaid through your job. Some people are paying too much tax because they didn’t know, and when they eventually discovered it, many don’t bother to claim their money back from HMRC.
This is sometimes called accidental overpayments and perhaps, it is the easiest way to enrich the HMRC if left unclaimed. By doing this, you stand a better chance to claim back what’s yours.
#3). Check On Whether You’re Not Overpaying
It is possible that you are currently overpaying the HMRC as a result of system errors. In 2011, a system error at the HMRC caused hundreds of thousands of taxpayers to be sent incorrect codes, which means that they were left paying the wrong amount. Make sure you check you’re on the right code as soon as possible, so you can claim back any overpayments.
#4). Pension Saving
Pensions are also a way of making the taxman pay you. For instance, if yo pay £800 into your pension, the taxman has to add £200. At retirement, yo can take 25 per cent of your fund as a tax-free lump sum.
#5). Interest Management
Managing the interest on your savings will also reduce the amount you pay as tax. Millions of non-taxpayers have income tax reduced from the interest paid on their savings. Ask your bank or building society to pay interest without deducting tax in future.
