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£9.3bn wasted on tax: can you pay less?
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| Man with forms (C) Rex Pictures |
4. Invest in a Child Trust Fund
Avoid waste by using up the tax free saving potential £242m in tax could be saved in their first year of existence.
All children born on or after 1 September 2002 receive a £250 voucher to start off their CTF, or £500 for those in lower income families, with a further £250 (or £500) when they reach the age of seven.
5. Top up your pension pot
You can take out a personal pension alongside their company scheme, pay in extra contributions and to encourage us to save for retirement the Government will give tax relief that can reduce your tax bill and increase your pension fund.
£726m that is currently paid in tax could be spared.
In simple terms, for every £80 contributed by you the Government will add £20, making a total contribution of £100. Higher rate taxpayers only need to put in £60 to get £40 of tax relief.
6. Use your annual ISA allowance
We miss out on £263m by not making use of tax-efficient savings options like National Savings & Investments or the annual tax-free individual savings accounts (Isa) allowance.
You can save £3,600 a year in a cash Isa without having to pay tax on the interest.
You can also invest the same amount in a stocks and shares Isa, or even put the whole £7,200 in an equity Isa without paying tax on the profits.
For more information on how to use your Isa allowance this year, and prepare for next year, visit our Isa centre.
