Whether you are a self-employed person, an employee, an investor, or any other form of taxpayer, there are a number of legal ways to reduce your tax obligations.

The start of the new tax year 2023–24 was last week, on April 6th, yet households throughout the UK are still having issues due to the cost-of-living crisis.

Whether you are a self-employed person, an employee, an investor, or any other form of taxpayer, there are a number of legal ways to reduce your tax obligations.

These suggestions will help you save more money during tax season.

Increase your tax-free savings contribution.

Savings accounts known as cash ISAs offer tax-free interest on the principal amount invested. Open a Cash ISA and deposit your money there for tax-free income for taxpayers over the age of 16.

The maximum amount that may be put into an ISA for the years 2023–2024 is £20,000, therefore taxpayers should make sure they put as much money as possible into these accounts.

Investors may be certain that their money is safe since these savings accounts are covered by the Financial Services Compensation Scheme (FSCS).

Use your employer-sponsored pension.

Make sure you participate in any workplace pension plans your company may provide. Since your company will often also contribute to your pension, this is a fantastic method to save for retirement.

The current yearly cap on pension contributions is £40,000. Nevertheless, this exemption can be lowered if your yearly income exceeds £240,000.

To find out what your contribution restrictions are, speak with your financial advisor or pension provider.

Lower the amount of income tax you paid.

Your tax code determines how much tax HMRC will collect from you, so you should first confirm that it is correct.

Caretakers of children, handicapped employees, and low-wage workers receive additional funding from the government in the form of tax credits. There are two different tax credits that you may use: the working tax credit and the child tax credit.

In approved married or civil partnership relationships, the spouse with the greater income may transfer some money to the other and obtain a tax credit equal to the amount transferred.

By completing form R40 from HMRC or by phoning them, you should ensure that any tax paid in excess of what is necessary is recovered within the appropriate time frame.

You may potentially avoid further fines by submitting your tax returns on time.

Explore the interest rates on savings accounts.

With the rate being the highest in 14 years, the Bank of England has been on a base rate hike binge.

This is great news for investors who want to use the finest savings accounts in the UK to maximise their interest income.

Check that the interest rate you are getting on your savings is in accordance with the recently revised base rate. You may also create another savings account that lets you earn money that is not subject to taxes.

Benefit from employee tax advantages

By setting up an account to handle payments to their childcare provider, employees can take advantage of tax-free daycare, which entitles them to a reimbursement of 25% of their childcare expenses.

The government will contribute £2, up to a maximum of £500 every three months, or £1,000 if a minor is handicapped, if you are found to be qualified for the initiative.

As they are currently taxed at a lower proportion of their list price than vehicles with a high CO2 rating, purchasing a low-emissions car will be a wiser choice if you use a corporate and wish to replace it.

(upday.com, moneysavingexpert.com)