When it comes to paying taxes, many of us are pretty darn clueless. Confronted with confusing clauses and obligations, our natural reaction is to either hire an expert or do the bare necessities to prevent trouble with the taxman and send off the papers. There are thus a number of specific laws, loopholes and rules that most of us aren’t aware of. Here are some things you might not have known about taxes.
Put it in Your Pension
This is perhaps the best known secret when it comes to taxes, yet still only really known on the hush-hush. If you have a pension you may be in for a treat. Pension contributions are exempt from the hands of the taxman, which ultimately means that income tax bills can be reduced through storing extra cash into your pension. This money will then be taken from your pre-tax income.
Non-Earning Spouses Qualify for Personal Allowance
Your spouse still qualifies for their personal allowance, whether they’re earning or not. This may come as a bit of a surprise as most would assume that an unemployed spouse would not be eligible.
What this ultimately means is that income generating assets can be moved into their ownership, thereby saving you a fair bit of money.
Capital Allowances can Save you Thousands
This is the one that gets large numbers of businessmen and women each year. A lack of awareness on the subject of capital allowances ultimately costs many of us big money every year.
Allowed by the HMRC, capital allowances are the counterbalances of money spent against your general revenue, in the cause of improving or buying a property. They thus allow businesses to write off the cost of capital assets and can be worth up to ten percent of property value.
However, what is not known is that further things can be claimed in the name of capital allowances, such as movable fixtures and fittings in a shop, in addition to plant and machinery in a factory. Furthermore, transportation costs can also be claimed, as can ladders and furniture.
There are a number of companies that can determine what you are rightfully owed through capital allowances however.
Loans from Employers
This may have you sitting on the edge of your seat: it is possible for a business to lend a worker of up to five grand with no tax complications! These certainly no payday loans! For example, if an employee wants to fully purchase their company car, such money can be very handy and will be exempt from the taxman.
When it comes to Inheritance Tax, there are a number of gift reliefs available due to the annual exemption for gifts up to £3,000. This applies to marriage gifts amongst others.
In fact – in accordance with your normal expenditure from your income – you might want to try and establish a regular pattern and basis for gifts, in order that they may be out of the taxman’s reach.