Billions went unclaimed last year. Here we explain how to avoid missing out. Are you missing out on money that is rightfully yours or have you forgotten to renew tax credits that you were paid last year? You could be entitled to tax credits if you earn up to £66,000 in certain circumstances.
We all hate paying tax but don’t, whatever you do, pay more of it than you need to. Can you really be sure you’re paying exactly the right amount of tax?
If you have council tax arrears, you will need to contact your local council andmake an arrangement to repay them. You will normally be expected to clear your arrears within the current financial year, which ends on 31 March. If you can’t afford this, work out what you can afford and tell the council.
It’s not a situation to relish, having the taxman – HM Revenue & Customs (HMRC) – investigate your financial and fiscal circumstances. But there are things you can do to make the process quicker and hopefully easier.
Rent will be treated as income and taxed in line with your basic or higher-rate tax bands. You will, however, be able to offset mortgage interest payments, letting agency costs and maintenance expenses against the taxable rental income. This makes it more tax-efficient to have a mortgage on your investment property rather than your main home where you can no longer get tax relief on your mortgage.
If you continue to earn income from UK investments, (such as company shares), while you are living abroad, the tax will be deducted at source. For bank and building society savings accounts you will not be liable for tax, but in order to qualify you will need to fill out a tax exemption form.
Inheritance tax is something most people do not worry about but probably should do, given the way house prices have risen over recent years. As a result of soaring property prices many individuals and couples will find that they have been pushed over the current thereshold. For those with concerns tax planning is essential.
If you want to donate money to charity and good causes there are many ways to go about it. And for taxpayers, if you choose the right payment method you can make sure the gift is tax-efficient too. While popping a few pounds in a donation box from time to time is welcomed by charities, they will gain more from your gift if you donate through a designated scheme, such as payroll giving or Gift Aid.
All properties that could be considered a dwelling are liable for council tax. This includes houses, flats, maisonettes and bungalows. Owners of mobile homes and houseboats will also have to pay council tax if it is their main home.
The self-assessment system for collecting income tax was introduced in 1997 and shifts the responsibility for declaring income on the taxpayer’s shoulders. There are strict deadlines you must meet to send back your tax return and pay tax owing. Missing them means incurring interest and penalties.