L&S Ultimate Tax Saving Guide

3 QUICK WAYS TO REDUCE YOUR TAXES

When you cannot increase your income, decrease your taxes, and save more than expected.

You need tax planning so that you can plan for your future. These tax saving strategies could really help you save a lot of money from your hard-earned salary each month and prevent you from paying more taxes.

1. Pay into a pension scheme – If you own a business or a corporation, you’re bound to pay corporate tax and dividend tax on your profits. You can save your tax money by getting paid your profits into the pension contributions. Also, if you’re an employee and want to save your tax money and use that money for yourself in the future, you can opt for pension Income tax is reduced by transferring the maximum amount of savings to a pension account.

How to Avoid the Tax Trap – If you earn more than £100,000, your tax-free personal allowance will get affected and result in paying £1 for every £2 earned. Even the bonus earned will be taxed at 60%. You are also required to pay 2% national insurance. The tax money and the national insurance money and your bonus can be saved by sacrificing it into your pension. Depletion of retirement allowances and welfare programs, the taxable income can be reduced by adding a partial amount of your income towards the retirement plan contributions. One of the most common tax minimization strategies employed by some high-income earners is to put the maximum amount in the retirement account.

2. Seeking long term capital gains – In 2022-2023, capital gains up to £12,300 are tax-free. A couple can claim twice their allowance, up to £24,600. Remember to use your allowance within the tax year. If your spouse or partner pays a lower tax rate than you do, transferring your assets and investments to them eliminates the need to pay capital gains tax. Provided by the government for when you buy shares through crowdfunding investments, you can deduct 30% of your investments from your income tax for the year. Similarly, Venture Capital Trusts (VCT) offer a 30% tax exemption for investments up to £200,000. Buying shares in a company through government approved schemes such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment scheme (SEIS) is also a smart move as the value of shares is exempt from income tax and national insurance. The tax on a long-term capital gain is always lower than the short-term gains, you can minimize your capital gains tax by holding assets for a year or more. Investors can make use of capital losses which means that capital losses realized in a particular year can be offset against profits in the same tax It can also be carried forward to offset future taxable capital gains if not fully utilized.

3. Decreasing your taxable deductions legally by taking advice from tax specialists and accountants – The tax filing process is complex and difficult. Even a small amount of debt can cause a big problem if not managed efficiently. Tax Professionals and accountants can play an important role in tax savings by assisting with financial services such as tax returns and self-assessments. Professionals help you reduce your debt and manage your taxes with regular financial insights. Accountants can help you minimize your taxes as they are more tax efficient. Also, an accountant can help you understand the various investment options available to grow your money and earn extra other than your monthly salary. From managing your books to helping you to realise where you can cut down your expenses and ascertain the liquidity of your finances, an accountant can save you an unexpected amount of money.

HOW CAN WE HELP?

As an Accounting Firm and Tax Specialists, we can help you in the best legal ways to minimize your tax deductions and help you save more than your expectations. Whether you’re an individual or a company, our constant focus for every client is reducing their tax and help them take more income to their home by making sure that they pay the legal minimum. Our expert and experienced accountants can take care of your taxes for you.

We focus on proving financial services and strategies for business success. When equipping businesses with different strategies and tools that promote success, growth and better management making decisions, we deliver services that are more than just accounting.

So, if you’ve a choice between “enjoying your holiday or tax return”, choose enjoying your holiday cause we’re here to manage your tax return and save your hard-earned money.