Make sure you aren’t paying too much: get your tax return right

IT’S THAT time of year again. We all try to pretend it’s not happening, but the reminder adverts have been slapped across the tube billboards for weeks now. So, at some point over the next three weeks, we are going to have to sit down and fill out our tax return. Many say the misery of the process stems from a sense that we are paying too much. And that feeling will no doubt be stronger this year since real average take-home pay has fallen 3.2 per cent in the last 12 months. This makes efficient tax planning all the more important.

CLAWING BACK YOUR CASH
There is some advice that is always worth being reminded of at this time of year: check that you are classified under the correct tax code (visit www.hmrc.gov.uk if you haven’t) and don’t forget to get the form in before the deadline (31 January). We’ve also decided to list below some of the allowances and relief offers that you may not have realised you were entitled to.

INCOME | EMPLOYEE BENEFITS
PENSION PAY-IN SCHEME
Making contributions to your employer's pension scheme can be made from your gross pay before tax. The great news is that this includes any voluntary contributions you make.

TAX-FREE SEASON TICKET LOANS
Remember, season ticket loans from your employer are tax-free.

COMPANY CAR TAX PERKS
If you have recently switched to a greener company car, bear in mind that these are now taxed at a lower rate than the gas-guzzling variety. Also, if you use a pool car through work, this is also eligible for relief.

INCOME | SELF-EMPLOYMENT
TAX-DEDUCTIBLE EXPENSES:
Not all business expenses are tax deductible, but you can claim back certain expenses– this can include a proportion of your lighting, heating, water and even council tax bills if you work at home.

SELF-EMPLOYED CAR COSTS:
While sadly you can’t claim back the taxes on buying a car, you can claim back the running costs.

ANNUAL LOSSES:
It is possible to carry forward losses from one year and offset them against profits from the next. Even if this doesn’t save you any money in the long run, it could keep your cash flow situation healthy.

INCOME | SAVINGS & INVESTMENTS
COUPLES GET A JOINT CGT ALLOWANCE
Married couples and civil partners who own assets jointly can claim a double allowance of £20,200.

CHILDREN’S SAVINGS
You can prevent your child being taxed on their savings by completing a simple R85 form on their behalf. These can be found on the HM Revenue &?Customs website.

CGT NOT CHARGED ON SHARES HELD IN AN ISA
CGT is not charged on the sale of shares or units held in an individual savings account (Isa). But remember, you will be taxed at 10 per cent on dividends earned.

INCOME | PROPERTY
RENTAL RELIEF:
If you rent a room you can opt into a scheme that lets you collect up to £4,250 in rent per year tax-free if the lodger lives in your home.

LANDLORD’S GREEN RELIEF:
If you rent out a property, you can claim up to £1,500 for insulation, draught proofing and installing a hot water system in the year of installation.

REDUCE CAPITAL GAINS TAX ON BUY-TO-LET:
If your rental home has been your own home in the past, you could qualify for tax relief on the last three years of ownership.