How confident are you in completing your tax return? Many taxpayers miss out on valuable opportunities to maximise their tax position simply because they’re unaware of the strategies available to them.
Around £500 million in tax refunds go unclaimed each year due to unfiled deductions. Don’t miss out on valuable opportunities to maximise your tax position.
Understanding and utilising available tax-saving strategies are essential to ensure you’re filing a tax return that is reflective of your situation.
Here are some effective strategies to support you in ensuring you’re not leaving potential tax deductions off your personal tax returns:
Take your time time
One of the most straightforward ways to protect your tax position is by claiming all eligible deductions, this takes time to ensure you’re aware of the potential deductions, what you can claim and sourcing the relevant paperwork.
Here are a few examples:
- Business Expenses: If you’re self-employed, keep track of all business-related expenses. This includes travel, office supplies, utilities, and even a portion of your home office costs.
- Medical Expenses: Certain medical expenses not covered by insurance can also be claimed.
- Professional Fees: Membership fees for professional organisations related to your job can be deducted.
Utilise Tax Credits
Tax credits directly reduce your tax liability and can significantly impact any potential tax refund.
Some of the key tax credits include:
- Child Tax Credit: If you have children, you might qualify for this credit, which reduces the amount of tax you owe.
- Working Tax Credit: Available to those on a low income even if you have no children.
- Marriage Allowance: If you’re married or in a civil partnership and one partner earns less than the personal allowance, you might be able to transfer some of the allowance to the higher-earning partner to reduce the overall tax bill.
Charitable Donations
Donations to registered charities can not only support good causes but also provide tax relief. Under Gift Aid, charities can claim an extra 25p for every £1 you donate, and higher-rate taxpayers can claim the difference between the basic rate and higher rate on the donation.
Investment Losses
If you’ve suffered losses on investments, you can use these to offset gains and lower your tax bill. Make sure to report these losses correctly to take full advantage of this benefit.
Tax-Efficient Investments
Investing in tax-efficient schemes can help you save on tax.
Examples include:
- Individual Savings Accounts (ISAs): Savings and investments within ISAs are exempt from income tax and capital gains tax.
- Enterprise Investment Scheme (EIS): Investing in EIS-qualifying companies offers significant tax reliefs, including income tax relief and exemption from capital gains tax on disposal after three years.
- Pension Contributions: Contributions to pension schemes are made from pre-tax income, effectively reducing your taxable income.
Finally, whilst we opened with ensuring you take your time… it is important you don’t take too long. Be aware of the deadlines and submit your tax return as early as possible.
According to HMRC, 1.1 million people missed the tax return deadline in 2024, potentially subjecting themselves to fines and missed opportunities to better manage their tax position and any tax liabilities.
Maximising your tax position requires a proactive approach and thorough understanding of available deductions, credits, and tax-efficient investments – navigating these strategies can be complex without professional guidance.
At BAS, we’re dedicated to helping you uncover every possible tax-saving opportunity to maximise your refund.
Contact us today to benefit from our expert tax return services and ensure you’re not leaving money on the table.
