What Can I Claim So I Don’t Have To Pay Tax?

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Taxes are a pain. That is something that most people would agree upon as a statement. Whether you are a billionaire, worker or someone on the streets, you pay some amount to the government. It is a pain because it takes a cut out of your hard-earned money. The higher your compensation is, the more significant cut that they get. It can be quite disorienting to see the amounts, especially if you are the one processing them.

However, they are necessary for our government. As a vehicle with its fuel, this is the primary way that our national institution can function. This funds almost everything that we see our governing body is doing that. Whether we like it or not is out of the question. As long as we know where the money goes, most of us are all right with it. Unfortunately, there are still cases wherein it can be misused horribly.

The Government For The People

With all of those issues aside, it is still a civic duty to pay our taxes. In return, it should also be our right as a citizen to know where it goes and how used by them. Meanwhile, it doesn’t change the fact that it can feel so discouraging to pay a lot of money for this. Don’t even try to deny it; we would usually arrive at this moment when we are so frustrated with the people we voted we placed in power. 

This is why there are a lot of people who also try to evade it one way or the other. It is an offence to escape payment. You would be liable for it, and cases can be levied upon you. It can also lead to heavier fines, aside from the amount that you were supposed to pay. You might already know that there is even a late fee if you missed your deadline for payment. However, there are more legal ways for you to avoid paying it.

Well, this is not necessarily tax evasion. However, there are claims that you can do to make the government reduce your amount to be paid altogether. Some people think that this is just for those who are running a business. If you look closely, you would see that you can also do it as long as you know how to process it properly with Her Majesty’s Revenue & Customs. It might be a bit complicated, but it can be worth it as a citizen of this country.

What You Can Declare to Ease Your Payments from Tax

Private Pensions

This is usually done for those who are employed. However, their employer deducts a portion of their salary for a pension before calculating income tax. It is also often processed for those who have to pay at least 20% of their income as tax. In Scotland, it can go lower to 19%. You can process for relief if you are not the one paying for the pension, it is not an automated scheme, or the provider has processed the 20% for you. 

However, this is different from life insurance. You cannot process for relief with this one unless you are in a protected scheme. Before you do everything, make sure to check on your policies not to get confused.

Charity

Another thing that is usually proclaimed to have this benefit are charity works. You can have this through Gift Aid or having Payroll Giving on your account. However, it would be best if you went to HMRC first when it comes to Gift Aid so that they can add you to the list. You also need to do a Self-Assessment tax return or else you would still need to contact HMRC for it. The processing would be different if you already pay 20% of your income as tax. 

Maintenance Payments

If you are still supporting an ex-spouse because of an agreement (usually after a divorce), then you can also have this relief. You need to prove that you still need to support this ex-partner and/or your children who are 21 years old and below. Usually, 10% of the total maintenance payment is awarded to you once it has already been approved. 

Ship Work Outside of the UK

If you have worked overseas on a ship, then you might have this benefit, too. However, you need to have worked on a shipping vessel for more than 365 days. You must also be a UK resident or living in a European Economic Area with a British passport. If you are a Crown employee thoroughly, then you are not eligible for this benefit. However, the Royal Fleet Auxiliary can process these claims as long as they meet the requirements. 

Sole Proprietor For A Business

As long as they are allowable expenses, then you can have tax deductions as the sole owner of your company. This includes but not limited to: travel, health, food, clothing, etc. If you are not certain, then you can always contact the Self-Assessment helpline of the HMRC. Allowances under your capital can also be considered, like your equipment and mechanical costs. 

Employed But Still Spending Money For Work

If you are working in a company, but you still spend doing your job, you can be eligible for a tax cut. This would usually include travel expenses since there are companies that do not cover this. As long as your employer does not reimburse it cash or kind, then you cannot process this claim for yourself. Also, you need to keep track of all of your expenses, including receipts, as this will be used to see whether you are eligible or not.

When it comes to taxation, there are so many ways that you can still pay it without the exorbitant amounts. Companies do it all the time. As a citizen, it is your right to know these completely legal ways so that you do not have to suffer for those expenses. It might not give anything back wholly. With the current pandemic, though, any help is welcomed, but we should always look for the best. 

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Annette Ferguson

Annette Ferguson

Owner of Annette & Co. - Chartered Accountants & Certifed Profit First Professionals. Helping Online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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