Are you maximising on the use of tax reliefs?

Published by Jo White on 6 December 2022

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There are a number of tax reliefs available to individuals and you could be missing out on hundreds or even thousands of pounds of tax savings each year if you don’t claim them. Not all of them will be suitable for everyone, but it is always worth being aware of what options may be available to you.

Where an individual has taxable income of more than £100,000, they will start to lose the benefit of their personal allowance.

For those individual’s claiming Child Benefit, where their income exceeds £50,000 then a clawback of these payments will be made.

With interest rates rising those individuals whose interest income becomes more than £1,000 may now have to pay Income Tax on these amounts.

So what options are available?

There are four reliefs that can often overlooked. These being:

  1. 1. Charitable donations

    Should a taxpayer make a qualifying gift aid donation then it is possible to claim an extension on their basic rate band meaning more income is taxable at 20%. Should they make a donation in the following tax year but prior to the submission of their self-assessment tax return, they can carry back the tax relief on the donation itself.

  2. 2. Tax efficient investments

    If an investor has made qualifying Enterprise Investment Scheme or Seed Enterprise Investment Scheme investments during the current tax year, providing they have received the certificates EIS3/SEIS3, they are able to make the income tax relief claim on their tax return for the year ended 5 April 2022.

  3. 3. Share loss relief

    If any qualifying investments have been disposed of at a loss the taxpayer can carry back the loss one tax year, offsetting against their taxable income.

  4. 4. Pension contributions

    If an individual is making personal pension contributions, they can claim the extra tax relief via their Tax Return. If they have made pension contributions in the past and not claimed the additional tax relief it may be possible to claim this tax back from HMRC now.

With the proposed reduction of the Capital Gains Tax free allowance being announced in the Autumn Statement it may also be worth considering making use of the higher CGT free allowance of £12,300, this year before is reduces to only £6,000 from 6 April 2023.

As there are a lot of factors which can influence the tax relief options available to you, it’s important to seek specialist advice. Our dedicated team can provide further information, so contact us today to learn more.

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