Mon - Sat 9.00 - 18.00 Sunday Closed
0345 512 0102

What UK Tax Breaks Am I Entitled To?

Tax allowances and reliefs: Tax allowances and reliefs are amounts of money that you can earn or claim without having to pay tax on them. They can be used to reduce your tax bill by reducing the amount of income that is subject to tax. Some examples of tax allowances and reliefs include:

  • Personal Allowance: This is the amount of income you can earn tax-free each tax year. The Personal Allowance is set by the government and is currently £12,570 for the 2021/2022 tax year.

  • Marriage Allowance: This allows you to transfer some of your Personal Allowance to your spouse or civil partner if they earn less than you. The Marriage Allowance allows you to reduce your partner’s tax bill by up to £1,250. You can read more about Marriage Allowances in our dedicated blog by clicking this link – What is a marriage allowance? – Finanche Limited

  • Blind Person’s Allowance: If you are registered blind, you may be able to claim an extra allowance on your tax return. The Blind Person’s Allowance is currently £2,960 for the 2021/2022 tax year.

  • Rent a Room Relief: If you rent out a room in your home and the rent you receive is less than £7,500 per year, you may be able to claim Rent a Room Relief. This allows you to earn up to £7,500 tax-free from renting out a room in your home.

  • Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) reliefs: These are tax reliefs for individuals who invest in small, unquoted trading companies. EIS and SEIS reliefs allow you to reduce your income tax bill by investing in these types of companies.

  • Pension schemes: A pension scheme is a way to save for retirement. Contributions to a pension scheme are tax-deductible, which means you can claim back the tax you have paid on the money you have contributed. In addition, the money you save in a pension scheme is not subject to income tax or capital gains tax. There are several types of pension schemes available in the UK, including workplace pension schemes, personal pension schemes, and stakeholder pension schemes.

  • Charitable donations: Donating to charity through the Gift Aid scheme allows the charity to claim back the basic rate of tax on your donation. This means that for every £1 you donate, the charity can claim back 25p. To be eligible for Gift Aid, you must be a UK taxpayer and must pay an amount of income tax or capital gains tax that is at least equal to the amount of tax the charity will claim on your donation. Charitable donations can be made in a variety of ways, including cash donations, donations of property or shares, and legacies left in a will.

  • Individual Savings Accounts (ISAs): An ISA is a tax-efficient way to save and invest. There are different types of ISAs available, including Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs. The money you save in an ISA is not subject to income tax or capital gains tax. You can contribute up to a certain amount to an ISA each tax year, and the amount you can contribute may vary depending on the type of ISA you choose. ISAs can be a good option for people who want to save or invest money without having to pay tax on the interest or returns they earn.

  • Tax-free savings accounts: There are several tax-free savings accounts available in the UK, including NS&I (National Savings and Investments) Premium Bonds and Children’s Savings Bonds. Interest earned on these accounts is tax-free.

It’s important to note that tax rules can change over time and may vary depending on your individual circumstances. It is always advisable to seek professional advice if you have any questions about your finances. Contact one of our accountants at Finanche, who will be happy to help devise a tax-efficient strategy for your finances.