So when did saving tax become undesirable ?

After reading news and media articles lately, a person could be forgiven for thinking that any effort to reduce your tax bill will find you among the ranks of the comic book villains.

Current global economic difficulties and severe cut backs at home, have forced many to re-evaluate their spending habits and downsize their ambitions.

Unfortunately, what is rarely mentioned, is the importance of the many small businesses and consumer support network that helps to keep the wheels of our economy turning, and money flowing through all levels of society.

We feel that it is vital to support these hard working individuals and ensure their businesses have the chance to flourish.

While we accept that tax is part of life, excessive tax is unproductive. Let’s face it, each and every contact with money generally involves a tax at some point, whether the money is earned, saved, or spent.

We believe that a more positive outlook would be beneficial, and in view of this we do our best to support businesses and individuals, helping them to realise their dreams and promote local prosperity.

Many people are unaware of the fact that for example:

If your business has made losses, have you made sure that those losses are being used to reduce your current tax bills ?

If you are self employed, it may be possible to set losses against your other income, or even against income from the previous year.

This ensures that a good year’s trading can help support the business if it hits a bad year.

If you would like to hear more of our ideas please give Steve a call on 01225 751302.

Paying the correct amount of tax ?

It is always worth checking that you are paying the correct amount of tax.  Not everyone does but making a few checks, is time well spent.

 The wrong calculation could leave you out of pocket or worse in line for an unexpected tax bill.

 HM Revenue and Customs (HMRC) use information about wages and pensions to work out what tax to deduct, unfortunately, anything incorrect or missing can put a ‘spanner in the works’ and result in inaccuracy.  This is more likely to happen if you do not submit a tax return or have multiple jobs or pensions.

What you need to do:

If you get a PAYE P800 tax calculation from HMRC there should be some notes with it to explain each section, so if there is anything you are unsure of this should help.

 Other documents which you can use to help check the figures on your P800 are:

  • form P60 – you get this at the end of each tax year
  • form P45 – you get this when you leave a job
  • PAYE Coding Notice
  • P11D Expenses and benefits (business owners only)
  • P9D Expenses payments and income from which tax cannot be deducted
  • bank and building society statements

If you think that HMRC have made a mistake, it is best to write to them and explain what you think needs amending.  Keep a copy of your letter in case you need to refer to it later.

The address for PAYE enquiries is:

HM Revenue & Customs
Pay As You Earn
PO Box 1970
L75 1WX

You should also consider:

If you have made pension or gift aid contributions, and HMRC don’t know about it, it could affect your tax.

Blind persons allowance is often forgotten.  This also includes anyone with severely impaired sight, and can be transferred to a spouse, so it is worth checking if you are eligible. 

Employees may be able to claim the cost of laundering uniforms needed for work, if their employer does not provide this service or recompense.

 If it all seems a bit much we are more than happy to help, and can also apply for a tax refund on your behalf should you be entitled.