How can I lower my personal tax bill?

Contact us for expert advice regarding your taxes

Whether you feel like you are paying too much tax or just want to ensure you are tax-efficient, there are many areas you can review.

Here are some of the ways you can minimise your tax:

  1. Allowances – The government have a wide range of allowances available to bring down your tax bill. Some of these include the use of home as an office, marriage allowance, savings income allowance.
  2. Capital Gains Tax (CGT) – You could utilise the CGT exemption by buying and selling assets and shares. If you have a CGT bill, you could defer the gain and invest it in something else, giving you access to reinvestment relief.
  3. Property – You may be able to reorganise the property’s ownership to split the profits more efficiently. A capital allowances review could also highlight some savings.
  4. Enterprise Investment Scheme (EIS) – By investing in the EIS, you will receive income tax relief of 30% on the amount invested, and any growth will be exempt from Capital Gains Tax.
  5. Venture Capital Trust (VCT) – Any dividends received through a VCT are exempt from tax. The target return is greater than that of the Bank of England and similar to the EIS, you will receive tax relief at 30% of the amount invested.
  6. Seed Enterprise Investment Scheme (SEIS) – This is similar to the Enterprise Investment Scheme. However, tax relief is 50%, and the risk is much higher.

If you are a director of a company, there are few other areas you could review:

  1. Remuneration – how you take money out of your business could affect your tax bill. Depending on how much income you receive, you could utilise a mixture of extraction techniques, including dividends and salary.
  2. Rent – If you personally own the property that your business operates from, you could charge your business rent to use the property as an office.
  3. Directors Loan Account – If you loan money to your business, you could charge interest on the amount, which can be extracted tax-free and bring down your corporation tax bill.
  4. Trivial Benefits – You can give yourself a tax-free gift a few times a year as long as it meets the trivial benefits criteria.
  5. Reorganise shares – You may be able to reorganise the shareholding in your business to allocate dividends more efficiently. This may involve gifting shares to your spouse or children.

These are just a few of the ways you can minimise your tax. Although taxes are one of life’s certainties, we review your taxes as a whole to ensure your tax bill is as efficient as possible.

How can we help?

  • Income Planning for directors, shareholders, property owners and business owners
  • CGT – If you own and sell valuable assets, such as additional property, you may need to pay CGT on the profit. We can do the calculations for you or tell you if the asset is exempt.
  • Inheritance Tax (IHT) and Estate Planning – We can tell you how much IHT your beneficiaries might have to pay in the future. We can help you create a plan for passing on wealth and, if applicable, your business in the most tax-efficient way.
  • Trusts – We can advise on the initial creation of a trust and help you to choose the most suitable structure. Once the trust has been formed, we can provide ongoing advice concerning the running of the trust.
  • HMRC tax investigations – You should take all enquiries by HMRC seriously. Green & Co has dealt with tax investigations at all levels, and we can help navigate you through your investigation.

If you would like to discuss your situation with one of our team. Please get in touch with us today.

Visit the Personal Tax page for more information about our personal tax services.
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