Our 5-minute read – Tax Tips – for UK doctors and dentists will help you save tax, get organised with your tax affairs and make sure you meet important deadlines with ease.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
The 5th of April is almost upon us! You might think there’s nothing left to do but sit and wait for the end of the tax year to pass you by, but there’s still time to save on tax.
In the next few days, you can do a lot to help lower your tax bill by taking advantage of tax efficiencies and allowances and keep more money in your pocket.
From big-ticket savers like ISAs and pensions to savvy planning and purchases, here’s a few things you can do in the 11th hour to save money.
ISA Allowance
Your annual ISA allowance for this tax year is £20,000 across all the different types (cash ISA, stocks and shares ISA, innovative finance ISA, and Lifetime ISA). You have the ability to invest your entire allowance in just one type or divide it up between the different ones.
ISAs are a great, tax-efficient and flexible option to hold your assets. You can keep all your investments including bonds, funds, equities, property, and cash in one place and not worry about income tax on interest or dividends that you earn.
ISA allowances reset at the beginning of each tax year so don’t let this great way to save tax get away from you!
Private Pension
Each individual gets an annual allowance for pension contributions of £40,000 per tax year. However, there are rules that make this not so straightforward. If you earn above a certain limit or have already taken pension benefits then the allowance may be reduced.
Basic-rate tax relief is 20% so this automatically bumps up your contributions – this is a great chance to basically get money for nothing.
You can claim the extra tax relief on your annual tax return or by adjusting your tax code if you’re a higher-rate or additional-rate taxpayer.
Other ways to save
Contributing as much as possible to your ISA and pension account are major ways to save tax before the end of the year, but there are also other ways:
- Claim tax relief on all expenses for your business or rental property
- Make your large purchases now to claim the Annual Investment Allowance for new capital items
- Use tax breaks (before you lose them)
- Combine allowances with your spouse or civil partner
- Make charitable donations