We are still in the early period of the new tax year which started on April 6th, 2019 and ends on 5th April 2020. With over ten months left what can you do to make sure you are as tax efficient as possible and that you don’t pay any more tax to HMRC than is necessary - Here's our tips:
It is very common for HMRC to put you on the wrong tax code. For the vast majority this means that the tax you pay via PAYE is more than what it should be. HMRC seem to be more prevalent in issuing codes that collect too much tax rather than the other way around.
The marriage allowance is available if one spouse or civil partner earns less that the £12,500 personal allowance in 19/20 while the other pays the basic rate of income tax. The non-tax paying partner can ‘give’ £1250 of their personal allowance to the tax paying partner. By increasing their personal allowance by this £1250 the tax paying partners pays up to £250 less tax. It is only available if the tax paying partner is taxed at basis rate. It is not available if they pay high rate tax.
The tax-free allowance for capital gains has increased from £11,700 to £12,000 in this tax year. Capital Gains tax is charged on the profit you make from selling certain investments. Examples include shares, works of art and second homes but the increase in the allowance means you can make a little more profit before tax becomes due.
If you are changing your company car, consider a low-emissions model. These are now taxed at a lower percentage of their list price than cars with a high CO2 rating.
Donating to a registered Charity is tax free. Either you or the Charity can claim back the tax through Gift Aid. If you pay high rate or additional high rate tax you can also claim back the difference between the basic and higher rate of income tax on any Gift Aid donations. This can be done via your Self-Assessment Return but if you are not required to submit one then contact HMRC direct and ask for a P810 form. Once received and verified they will adjust your tax code.